The cytokine IL-12 induces IFN-γ production by T and NK cells. In preclinical models, it contributes to antitumor immunity. However, in clinical testing, it has shown limited benefit in patients with any one of a variety of malignancies. Moreover, in a clinical trial testing a combination of IL-12 and rituximab in patients with follicular B cell non-Hodgkin lymphoma (FL), those treated with IL-12 showed a lower response rate, suggesting that IL-12 actually plays a detrimental role. Here, we investigated whether the failure of IL-12 treatment for FL was due to T cell exhaustion, a condition characterized by reduced T cell differentiation, proliferation, and function, which has been observed in chronic viral infection. We found that extended exposure to IL-12 induced T cell exhaustion and contributed to the poor prognosis in FL patients. Long-term exposure of freshly isolated human CD4+ T cells to IL-12 in vitro caused T cell dysfunction and induced expression of TIM-3, a T cell immunoglobulin and mucin domain protein with a known role in T cell exhaustion, via an IFN-γ-independent mechanism. TIM-3 was required for the negative effect of IL-12 on T cell function. Importantly, TIM-3 also was highly expressed on intratumoral T cells that displayed marked functional impairment. Our findings identify IL-12- and TIM-3-mediated exhaustion of T cells as a mechanism for poor clinical outcome when IL-12 is administered to FL patients.