Tumor progression is facilitated by regulatory T cells (Tregs) and restricted by effector T cells. In this study, we document parallel regulation of CD8+ T cells and Foxp3+ Tregs by programmed death-1 (PD-1, PDCD1). In addition, we identify an additional role of cytotoxic T lymphocyte antigen-4 (CTLA-4) inhibitory receptor in further promoting dysfunction of CD8+ T effector cells in tumor models (CT26 colon carcinoma and ID8-VEGF ovarian carcinoma). Two thirds of CD8+ tumor-infiltrating lymphocytes (TIL) expressed PD-1, while one third to half of CD8+ TIL co-expressed PD-1 and CTLA-4. Double-positive (PD-1+CTLA-4+) CD8+ TIL had characteristics of more severe dysfunction than single-positive (PD-1+ or CTLA-4+) TIL, including an inability to proliferate and secrete effector cytokines. Blockade of both PD-1 and CTLA-4 resulted in reversal of CD8+ TIL dysfunction and led to tumor rejection in two-thirds of mice. Double blockade was associated with increased proliferation of antigen-specific effector CD8+ and CD4+ T cells, antigen-specific cytokine release, inhibition of suppressive functions of Tregs, and upregulation of key signaling molecules critical for T cell function. When used in combination with GVAX vaccination (consisting of GM-CSF-expressing irradiated tumor cells), inhibitory pathway blockade induced rejection of CT26 tumors in 100% of mice and ID8-VEGF tumors in 75% of mice. Our study indicates that PD-1 signaling in tumors is required for both suppressing effector T cells and maintaining tumor Tregs, and that PD-1/PD-L1 pathway (CD274) blockade augments tumor inhibition by increasing effector T cell activity, while attenuating Treg cell suppression.