The inflamed liver in chronic hepatitis B virus (HBV) infection (CHB) is characterized by a large influx of non-virus-specific CD8 T cells. Little is known about the functional capacity of these lymphocytes, which could provide insights into mechanisms of failure of viral control and liver damage in this setting. We compared the effector function of total circulating and intrahepatic CD8 T cells in CHB patients and healthy donors. We demonstrated that CD8 T cells from CHB patients, regardless of their antigen specificity, were impaired in their ability to produce interleukin-2 and proliferate upon TCR-dependent stimulation. In contrast, these CD8 T cells had preserved production of the proinflammatory cytokines interferon-gamma and tumor necrosis factor-alpha. This aberrant functional profile was partially attributable to down-regulation of the proximal T cell receptor signaling molecule CD3zeta, and could be corrected in vitro by transfection of CD3zeta or replenishment of the amino acid arginine required for its expression. We provide evidence for depletion of arginine in the inflamed hepatic microenvironment as a potential mechanism for these defects in global CD8 T cell signaling and function. These data imply that polarized CD8 T cells within the HBV-infected liver may impede proliferative antiviral effector function, while contributing to the proinflammatory cytokine environment.