This study demonstrates that CD8+ T cells in the tumor microenvironment display reduced functionality and hyporesponsiveness. TGF-beta contributed markedly to the tumor-infiltrating CD8+ T cells' (TILs) reduced functionality, which could be reversed using a small molecule TGF-beta inhibitor. Upon T-cell receptor (TCR) activation, the activation of ITK and ERK kinases were reduced in CD8+ TILs, as compared to splenic CD8+ T cells: TGF-beta inhibitor could reverse this phenomenon. This study demonstrates for the first time the association of the Spred-1 gene, an inhibitor of the Ras/MAPK pathway, with CD8+ TILs and TGF-beta activity. Spred-1 was upregulated in CD8+ TILs and TGF-beta enhanced the expression of Spred-1 in effector/memory CD8+ T cells and not in rested/memory CD8+ T cells. Based on these findings, this study supports the hypothesis that TGF-beta mediates an inhibitory mechanism on CD8+ TILs involving TCR-signaling blockade and the upregulation of Spred-1, thus implicating Spred-1 as a potential new target for future anti-tumor immune studies.