Tumor-reactive T cells become unresponsive in advanced tumors. Here we have characterized a common mechanism of T cell unresponsiveness in cancer driven by the upregulation of the transcription factor Forkhead box protein P1 (Foxp1), which prevents CD8⁺ T cells from proliferating and upregulating Granzyme-B and interferon-γ in response to tumor antigens. Accordingly, Foxp1-deficient lymphocytes induced rejection of incurable tumors and promoted protection against tumor rechallenge. Mechanistically, Foxp1 interacted with the transcription factors Smad2 and Smad3 in preactivated CD8⁺ T cells in response to microenvironmental transforming growth factor-β (TGF-β), and was essential for its suppressive activity. Therefore, Smad2 and Smad3-mediated c-Myc repression requires Foxp1 expression in T cells. Furthermore, Foxp1 directly mediated TGF-β-induced c-Jun transcriptional repression, which abrogated T cell activity. Our results unveil a fundamental mechanism of T cell unresponsiveness different from anergy or exhaustion, driven by TGF-β signaling on tumor-associated lymphocytes undergoing Foxp1-dependent transcriptional regulation.