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Programmed cell death protein 1 (PD-1) is expressed on T cells upon T cell receptor (TCR) stimulation. PD-1 ligand 1 (PD-L1) is expressed in most tumor environments, and its binding to PD-1 on T cells drives them to apoptosis or into a regulatory phenotype. The fact that PD-L1 itself is also expressed on T cells upon activation has been largely neglected. Here, we demonstrate that PD-L1 ligation on human CD25-depleted CD4+ T cells, combined with CD3/TCR stimulation, induces their conversion into highly suppressive T cells. Furthermore, this effect was most prominent in memory (CD45RA-CD45RO+) T cells. PD-L1 engagement on T cells resulted in reduced ERK phosphorylation and decreased AKT/mTOR/S6 signaling. Importantly, T cells from rheumatoid arthritis patients exhibited high basal levels of phosphorylated ERK and following PD-L1 cross-linking both ERK signaling and the AKT/mTOR/S6 pathway failed to be down modulated, making them refractory to the acquisition of a regulatory phenotype. Altogether, our results suggest that PD-L1 signaling on memory T cells could play an important role in resolving inflammatory responses; maintaining a tolerogenic environment and its failure could contribute to ongoing autoimmunity.