The balance between proinflammatory mechanisms and the dampening of excessive immune activation is critical for successful clearance of a pathogen without harm to the host. In particular, molecules of the B7:CD28 family play a critical role in regulating T cell activation and peripheral tolerance. Chronic pathogens like HIV, which is characterized by ongoing viral replication despite detectable virus-specific T cell responses, and cancer cells have exploited these pathways to attenuate Ag-specific T cell immunity. This review summarizes evidence that molecules of the B7:CD28 family, PD-1, CTLA-4, and their ligands, play an active and reversible role in virus-specific T cell exhaustion associated with HIV infection in humans and in the SIV model in macaques. We discuss the potential for immunotherapeutic interventions based on manipulation of these inhibitory networks, the promising data obtained with blockade of the PD-1 pathway in animal models, and the challenges to such therapies.