Transcription factors that regulate the quiescence, proliferation and homing of lymphocytes are critical for effective immune system function. Here we demonstrate that the transcription factor ELF4 directly activated the tumor suppressor KLF4 'downstream' of T cell antigen receptor signaling to induce cell cycle arrest in naive CD8⁺ T cells. Elf4- and Klf4-deficient mice accumulated CD8⁺CD44^hi T cells during steady-state conditions and generated more memory T cells after immunization. The homeostatic population expansion of CD8⁺CD44^hi T cells in Elf4-null mice resulted in a redistribution of cells to nonlymphoid tissue because of lower expression of the transcription factor KLF2 and the surface proteins CCR7 and CD62L. Our work describes the combinatorial effect of lymphocyte-intrinsic factors on the homeostasis, activation and homing of T cells.