A paradox of tumor immunology is that tumor-infiltrating lymphocytes are dysfunctional in situ, yet are capable of stem cell-like behavior including self-renewal, expansion, and multipotency, resulting in the eradication of large metastatic tumors. We find that the overabundance of potassium in the tumor microenvironment underlies this dichotomy, triggering suppression of T cell effector function while preserving stemness. High levels of extracellular potassium constrain T cell effector programs by limiting nutrient uptake, thereby inducing autophagy and reduction of histone acetylation at effector and exhaustion loci, which in turn produces CD8+ T cells with improved in vivo persistence, multipotency, and tumor clearance. This mechanistic knowledge advances our understanding of T cell dysfunction and may lead to novel approaches that enable the development of enhanced T cell strategies for cancer immunotherapy.