In humans, the pathways of memory and effector T cell differentiation remain poorly defined. We have dissected the functional properties of ex vivo effector-memory (EM) CD45RA-CCR7- T lymphocytes present within the circulating CD8+ T cell pool of healthy individuals. Our studies show that EM T cells are heterogeneous and are subdivided based on differential CD27 and CD28 expression into four subsets. EM(1) (CD27+CD28+) and EM(4) (CD27-CD28+) T cells express low levels of effector mediators such as granzyme B and perforin and high levels of CD127/IL-7Ralpha. EM(1) cells also have a relatively short replicative history and display strong ex vivo telomerase activity. Therefore, these cells are closely related to central-memory (CD45RA-CCR7+) cells. In contrast, EM(2) (CD27+CD28-) and EM(3) (CD27-CD28-) cells express mediators characteristic of effector cells, whereby EM(3) cells display stronger ex vivo cytolytic activity and have experienced larger numbers of cell divisions, thus resembling differentiated effector (CD45RA+CCR7-) cells. These data indicate that progressive up-regulation of cytolytic activity and stepwise loss of CCR7, CD28, and CD27 both characterize CD8+ T cell differentiation. Finally, memory CD8+ T cells not only include central-memory cells but also EM(1) cells, which differ in CCR7 expression and may therefore confer memory functions in lymphoid and peripheral tissues, respectively.