T cells develop functional defects during HIV-1 infection, partially due to the upregulation of inhibitory receptors such as programmed death-1 (PD-1) and CTLA-4. However, the role of lymphocyte activation gene-3 (LAG-3; CD223), also known as an inhibitory receptor, in HIV infection remains to be determined. In this study, we revealed that LAG-3 on T cells delivers an inhibitory signal to downregulate T cell functionality, thereby playing an immunoregulatory role during persistent HIV-1 infection. We observed that HIV-1 infection results in a significant increase in LAG-3 expression in both the peripheral blood and the lymph nodes. The upregulation of LAG-3 is dramatically manifested on both CD4+ and CD8+ T cells and is correlated with disease progression. As expected, prolonged antiretroviral therapy reduces the expression of LAG-3 on both CD4+ and CD8+ T cells. The ex vivo blockade of LAG-3 significantly augments HIV-specific CD4+ and CD8+ T cell responses, whereas the overexpression of LAG-3 in T cells or the stimulation of LAG-3 on T cells leads to the reduction of T cell responses. Furthermore, most LAG-3 and PD-1 are expressed in different T cell subsets. Taken together, these data demonstrate that the LAG-3/MHC class II pathway plays an immunoregulatory role, thereby providing an important target for enhancing immune reconstitution in HIV-infected patients. Additionally, the LAG-3/MHC class II pathway may synergize with PD-1/PD ligand to enhance T cell–mediated immune responses.