The role of gamma interferon (IFN-γ) in the permanent control of infection with a noncytopathic virus was studied by comparing immune responses in wild-type and IFN-γ-deficient (IFN-γ −/−) mice infected with a slowly invasive strain of lymphocytic choriomeningitis virus (LCMV Armstrong). While wild-type mice rapidly cleared the infection, IFN-γ −/− mice became chronically infected. Virus persistence in the latter mice did not reflect failure to generate cytotoxic T-lymphocyte (CTL) effectors, as an unimpaired primary CTL response was observed. Furthermore, while ex vivo CTL activity gradually declined in wild-type mice, long-standing cytolytic activity was demonstrated in IFN-γ −/− mice. The prolonged effector phase in infected IFN-γ −/− mice was associated with elevated numbers of CD8⁺ T cells. Moreover, a higher proportion of these cells retained an activated phenotype and was actively cycling. However, despite the increased CD8⁺ T-cell turnover, which might have resulted in depletion of the memory CTL precursor pool, no evidence for exhaustion was observed. In fact, at 3 months postinfection we detected higher numbers of LCMV-specific CTL precursors in IFN-γ −/− mice than in wild-type mice. These findings indicate that in the absence of IFN-γ, CTLs cannot clear the infection and are kept permanently activated by the continuous presence of live virus, resulting in a delicate new balance between viral load and immunity. This interpretation of our findings is supported by mathematical modeling describing the effect of eliminating IFN-γ-mediated antiviral activity on the dynamics between virus replication and CTL activity.