Highly differentiated CD8⁺CD28⁻CD27⁻ T cells have short telomeres, defective telomerase activity, and reduced capacity for proliferation, indicating that they are close to replicative senescence. In addition, these cells express increased levels of the senescence-associated inhibitory receptor KLRG1 and have poor capacity for IL-2 synthesis and defective Akt (ser⁴⁷³) phosphorylation after activation. It is not known whether signaling via KLRG1 contributes to any of the attenuated differentiation-related functional changes in CD8⁺ T cells. To address this, we blocked KLRG1 signaling during T-cell receptor activation using antibodies against its major ligand, E-cadherin. This resulted in a significant enhancement of Akt (ser⁴⁷³) phosphorylation and T-cell receptor–induced proliferative activity of CD8⁺CD28⁻CD27⁻ T cells. Furthermore, the increase of proliferation was directly linked to the Akt-mediated induction of cyclin D and E and reduction in the cyclin inhibitor p27 expression. In contrast, the reduced telomerase activity in highly differentiated CD8⁺CD28⁻CD27⁻ T cells was not altered by KLRG1 blockade, indicating the involvement of other mechanisms. This is the first demonstration of a functional role for KLRG1 in primary human CD8⁺ T cells and highlights that certain functional defects that arise during progressive T-cell differentiation toward replicative senescence are maintained actively by inhibitory receptor signaling.