Cancer-specific TCF1 ⁺ stem-like CD8 ⁺ T cells can drive protective anticancer immunity through expansion and effector cell differentiation ^1-4 ; however, this response is dysfunctional in tumours. Current cancer immunotherapies ^2,5-9 can promote anticancer responses through TCF1 ⁺ stem-like CD8 ⁺ T cells in some but not all patients. This variation points towards currently ill-defined mechanisms that limit TCF1 ⁺ CD8 ⁺ T cell-mediated anticancer immunity. Here we demonstrate that tumour-derived prostaglandin E2 (PGE ₂ ) restricts the proliferative expansion and effector differentiation of TCF1 ⁺ CD8 ⁺ T cells within tumours, which promotes cancer immune escape. PGE ₂ does not affect the priming of TCF1 ⁺ CD8 ⁺ T cells in draining lymph nodes. PGE ₂ acts through EP ₂ and EP ₄ (EP ₂ /EP ₄ ) receptor signalling in CD8 ⁺ T cells to limit the intratumoural generation of early and late effector T cell populations that originate from TCF1 ⁺ tumour-infiltrating CD8 ⁺ T lymphocytes (TILs). Ablation of EP ₂ /EP ₄ signalling in cancer-specific CD8 ⁺ T cells rescues their expansion and effector differentiation within tumours and leads to tumour elimination in multiple mouse cancer models. Mechanistically, suppression of the interleukin-2 (IL-2) signalling pathway underlies the PGE ₂ -mediated inhibition of TCF1 ⁺ TIL responses. Altogether, we uncover a key mechanism that restricts the IL-2 responsiveness of TCF1 ⁺ TILs and prevents anticancer T cell responses that originate from these cells. This study identifies the PGE ₂ -EP ₂ /EP ₄ axis as a molecular target to restore IL-2 responsiveness in anticancer TILs to achieve cancer immune control.