In humans, the pathways of memory and effector T cell differentiation remain poorly defined. We have dissected the functional properties of ex vivo effector-memory (EM) CD45RA− CCR7− T lymphocytes present within the circulating CD8+ T cell pool of healthy individuals. Our studies show that EM T cells are heterogeneous and are subdivided based on differential CD27 and CD28 expression into four subsets. EM 1 (CD27+ CD28+) and EM 4 (CD27− CD28+) T cells express low levels of effector mediators such as granzyme B and perforin and high levels of CD127/IL-7Rα. EM 1 cells also have a relatively short replicative history and display strong ex vivo telomerase activity. Therefore, these cells are closely related to central-memory (CD45RA− CCR7+) cells. In contrast, EM 2 (CD27+ CD28−) and EM 3 (CD27− CD28−) cells express mediators characteristic of effector cells, whereby EM 3 cells display stronger ex vivo cytolytic activity and have experienced larger numbers of cell divisions, thus resembling differentiated effector (CD45RA+ CCR7−) cells. These data indicate that progressive up-regulation of cytolytic activity and stepwise loss of CCR7, CD28, and CD27 both characterize CD8+ T cell differentiation. Finally, memory CD8+ T cells not only include central-memory cells but also EM 1 cells, which differ in CCR7 expression and may therefore confer memory functions in lymphoid and peripheral tissues, respectively.