Control of Leishmania infantum infection is dependent upon Th1 CD4+ T cells to promote macrophage intracellular clearance of parasites. Deficient CD4+ T cell effector responses during clinical visceral leishmaniasis (VL) are associated with elevated production of IL-10. In the primary domestic reservoir of VL, dogs, we define occurrence of both CD4+ and CD8+ T cell exhaustion as a significant stepwise loss of antigen-specific proliferation and IFNγ production, corresponding to increasing VL symptomatology. Exhaustion was associated with a fourfold increase in the population of T cells with surface expression of Programmed Death 1 (PD-1) between control and symptomatic populations. Importantly, exhausted populations of CD8+ T cells and to a lesser extent CD4+ T cells were present prior to onset of clinical VL. VL exhausted T cells did not undergo significant apoptosis ex vivo after antigen stimulation. Antibody block of PD-1 ligand, B7.H1, promoted return of CD4+ and CD8+ T cell function and dramatically increased reactive oxygen species production in co-cultured monocyte-derived phagocytes. As a result, these phagocytes had decreased parasite load. We demonstrate for the first time that pan-T cell, PD-1-mediated, exhaustion during VL influenced macrophage reactive oxygen intermediate production. Blockade of the PD-1 pathway improved the ability of phagocytes isolated from dogs presenting with clinical VL to clear intracellular parasites. T cell exhaustion during symptomatic canine leishmaniasis has implications for the response to vaccination and therapeutic strategies for control of Leishmania infantumin this important reservoir species.