It was recently reported that inhibitory molecules such as programmed death-1 (PD-1) were upregulated on CD8(+) T cells during acute Friend retrovirus infection and that the cells were prematurely exhausted and dysfunctional in vitro. The current study confirms that most activated CD8(+) T cells upregulated expression of PD-1 during acute infection and revealed a dichotomy of function between PD-1(hi) and PD-1(lo) subsets. More PD-1(lo) cells produced antiviral cytokines such as IFN-γ and TNF-α, whereas more PD-1(hi) cells displayed characteristics of cytotoxic effectors such as production of granzymes and surface expression of CD107a. Importantly, CD8(+) T cells mediated rapid in vivo cytotoxicity and were critical for control of acute Friend virus replication. Thus, direct ex vivo analyses and in vivo experiments revealed high CD8(+) T cell functionality and indicate that PD-1 expression during acute infection is not a marker of T cell exhaustion.