Toxoplasma gondii infection induces a robust CD8 T cell immunity in the infected host, which is critical for keeping chronic infection under control. IFNγ production and cytolytic activity exhibited by CD8 T cells are critical functions needed to prevent the reactivation of latent infection. Paradoxically, the susceptible mice infected with the parasite develop encephalitis irrespective of the presence of vigorous CD8 T cell immunity. Recent studies from our laboratory have demonstrated that these animals have defect in the memory CD8 T cell population, which become dysfunctional due to exhibition of inhibitory receptors like PD-1. Although the blockade of PD-1-PDL-1 pathway rescues the CD8 response, PD-1hi expressing cells are refractory to the treatment. In this review, we discuss the development of CD8 memory response during chronic infection, mechanism responsible for their dysfunctionality, and possible therapeutic measures that can be taken to reverse the process.