Chronic infections induce T cells showing impaired cytokine secretion and up-regulated expression of inhibitory receptors such as PD-1. What determines the acquisition of this chronic phenotype and how it impacts T cell function remain vaguely understood. Using newly generated recombinant antigen variant-expressing chronic lymphocytic choriomeningitis virus (LCMV) strains, we uncovered that T cell differentiation and acquisition of a chronic or exhausted phenotype depend critically on the frequency of T cell receptor (TCR) engagement and less significantly on the strength of TCR stimulation. In fact, we noted that low-level antigen exposure promotes the formation of T cells with an acute phenotype in chronic infections. Unexpectedly, we found that T cell populations with an acute or chronic phenotype are maintained equally well in chronic infections and undergo comparable primary and secondary expansion. Thus, our observations contrast with the view that T cells with a typical chronic infection phenotype are severely functionally impaired and rapidly transition into a terminal stage of differentiation. Instead, our data unravel that T cells primarily undergo a form of phenotypic and functional differentiation in the early phase of a chronic LCMV infection without inheriting a net survival or expansion deficit, and we demonstrate that the acquired chronic phenotype transitions into the memory T cell compartment.