Chronic stimulation of CD8+ T cells triggers exhaustion, a distinct differentiation state with diminished effector function. Exhausted cells exist in multiple differentiation states, from stem-like progenitors that are the key mediators of the response to checkpoint blockade, through to terminally exhausted cells. Due to its clinical relevance, there is substantial interest in defining the pathways that control differentiation and maintenance of these subsets. Here, we show that chronic antigen induces the anergy-associated transcription factor EGR2 selectively within progenitor exhausted cells in both chronic LCMV and tumours. EGR2 enables terminal exhaustion and stabilizes the exhausted transcriptional state by both direct EGR2-dependent control of key exhaustion-associated genes, and indirect maintenance of the exhausted epigenetic state. We show that EGR2 is a regulator of exhaustion that epigenetically and transcriptionally maintains the differentiation competency of progenitor exhausted cells.