NY-ESO-1 is a “cancer-testis” antigen frequently expressed in epithelial ovarian cancer (EOC) and is among the most immunogenic tumor antigens defined to date. In an effort to understand in vivo tolerance mechanisms, we assessed the phenotype and function of NY-ESO-1–specific CD8⁺ T cells derived from peripheral blood lymphocytes (PBLs), tumor-infiltrating lymphocytes (TILs), and tumor-associated lymphocytes (TALs) of EOC patients with NY-ESO-1-expressing tumors, with or without humoral immunity to NY-ESO-1. Whereas NY-ESO-1–specific CD8⁺ T cells were readily detectable ex vivo with tetramers in TILs and TALs of seropositive patients, they were only detectable in PBLs following in vitro stimulation. Compared with PBLs, tumor-derived NY-ESO-1–specific CD8⁺ T cells demonstrated impaired effector function, preferential usage of dominant T-cell receptor, and enriched coexpression of inhibitory molecules LAG-3 and PD-1. Expression of LAG-3 and PD-1 on CD8⁺ T cells was up-regulated by IL-10, IL-6 (cytokines found in tumor ascites), and tumor-derived antigen-presenting cells. Functionally, CD8⁺LAG-3⁺PD-1⁺ T cells were more impaired in IFN-γ/TNF-α production compared with LAG-3⁺PD-1⁻ or LAG-3⁻PD-1⁻ subsets. Dual blockade of LAG-3 and PD-1 during T-cell priming efficiently augmented proliferation and cytokine production by NY-ESO-1–specific CD8⁺ T cells, indicating that antitumor function of NY-ESO-1-specific CD8⁺ T cells could potentially be improved by therapeutic targeting of these inhibitory receptors.