IFNγ is an immune mediator with concomitant pro- and anti-tumor functions. Here, we provide evidence that IFNγ directly acts on intra-tumoral CD8 T cells to restrict anti-tumor responses. We report that expression of the IFNγ receptor β chain (IFNγR2) in CD8 T cells negatively correlates with clinical responsiveness to checkpoint blockade in metastatic melanoma patients, suggesting that the loss of sensitivity to IFNγ contributes to successful antitumor immunity. Indeed, specific deletion of IFNγR in CD8 T cells promotes tumor control in a mouse model of melanoma. Chronic IFNγ inhibits the maintenance, clonal diversity and proliferation of stem-like T cells. This leads to decreased generation of T cells with intermediate expression of exhaustion markers, previously associated with beneficial anti-tumor responses. This study provides evidence of a negative feedback loop whereby IFNγ depletes stem-like T cells to restrict anti-tumor immunity. Targeting this pathway might represent an alternative strategy to enhance T cell-based therapies.