Inhibitory receptors (iRs) are frequently associated with "T cell exhaustion". However, the expression of iRs is also dependent on T cell differentiation and activation. Therapeutic blockade of various iRs, also referred to as "checkpoint blockade", is showing -unprecedented results in the treatment of cancer patients. Consequently, the clinical potential in this field is broad, calling for increased research efforts and rapid refinements in the understanding of iR function. In this review, we provide an overview on the significance of iR expression for the interpretation of T cell functionality. We summarize how iRs have been strongly associated with "T cell exhaustion" and illustrate the parallel evidence on the importance of T cell differentiation and activation for the expression of iRs. The differentiation subsets of CD8 T cells (naïve, effector, and memory cells) show broad and inherent differences in iR expression, while activation leads to strong upregulation of iRs. Therefore, changes in iR expression during an immune response are often concomitant with T cell differentiation and activation. Sustained expression of iRs in chronic infection and in the tumor microenvironment likely reflects a specialized T cell differentiation. In these situations of prolonged antigen exposure and chronic inflammation, T cells are "downtuned" in order to limit tissue damage. Furthermore, we review the novel "checkpoint blockade" treatments and the potential of iRs as biomarkers. Finally, we provide recommendations for the immune monitoring of patients to interpret iR expression data combined with parameters of activation and differentiation of T cells.