The key role of tissue-resident memory T (T ) cells in the immune regulation of hepatocellular carcinoma (HCC) has been investigated and reported, but the regulatory mechanism of tumor microenvironment on T cells is still unclear. Lymphocyte activating gene 3 (LAG-3) is a promising next-generation immune checkpoint that is continuously expressed due to persistent antigen exposure in the tumor microenvironment. Fibrinogen-like protein 1 (FGL1) is a classical ligand of LAG-3 and can promote T cell exhaustion in tumors. Here, we excavated the effect of FGL1-LAG3 regulatory axis on T cells in HCC. The function and phenotype of intrahepatic CD8 T cells in 35 HCC patients were analyzed using multicolor flow cytometry. Using a tissue microarray of 80 HCC patients, we performed the prognosis analysis. Moreover, we investigated the suppressive effect of FGL1 on CD8 T cells both in induction model and orthotopic HCC mouse model. There was an increase in LAG3 expression in CD8 T cells in end-stage HCC; moreover, FGL1 levels were negatively correlated with CD103 expression and related to poor outcomes in HCC. Patients with high CD8 T cell proportions have better outcomes, and FGL1-LAG3 binding could lead to the exhaustion of CD8 T cells in tumors, indicating its potential as a target for immune checkpoint therapy of HCC. Increased FGL1 expression in HCC may result in CD8 T cell exhaustion, causing tumor immune escape. We identified CD8 T cells as a potential immunotherapeutic target and reported the effect of FGL1-LAG3 binding on CD8 T cell function in HCC.