Antibody-mediated cancer immunotherapy targets inhibitory surface molecules, such as PD1, PD-L1, and CTLA-4, aiming to re-invigorate dysfunctional T cells. We purified and characterized tumor-infiltrating lymphocytes (TILs) and their patient-matched non-tumor counterparts from treatment-naïve NSCLC patient biopsies to evaluate the effect of PD1 expression on the functional and molecular profiles of tumor-resident T cells. We show that PD1+ CD8+ TILs have elevated expression of the transcriptional regulator ID3 and that the cytotoxic potential of CD8 T cells can be improved by knocking down ID3, defining it as a potential regulator of T cell effector function. PD1+ CD4+ memory TILs display transcriptional patterns consistent with both helper and regulator function, but can robustly facilitate B cell activation and expansion. Furthermore, we show that expanding ex vivo-prepared TILs in vitro broadly preserves their functionality with respect to tumor cell killing, B cell help, and TCR repertoire. Although purified PD1+ CD8+ TILs generally maintain an exhausted phenotype upon expansion in vitro, transcriptional analysis reveals a downregulation of markers of T-cell dysfunction, including the co-inhibitory molecules PD1 and CTLA-4 and transcription factors ID3, TOX and TOX2, while genes involved in cell cycle and DNA repair are upregulated. We find reduced expression of WNT signaling components to be a hallmark of PD1+ CD8+ exhausted T cells in vivo and in vitro and demonstrate that restoring WNT signaling, by pharmacological blockade of GSK3β, can improve effector function. These data unveil novel targets for tumor immunotherapy and have promising implications for the development of a personalized TIL-based cell therapy for lung cancer.