During microbial infection, responding CD8 T lymphocytes differentiate into heterogeneous subsets that together provide immediate and durable protection. To elucidate the dynamic transcriptional changes that underlie this process, we applied a single-cell RNA-sequencing approach and analyzed individual CD8 T lymphocytes sequentially throughout the course of a viral infection in vivo. Our analyses revealed a striking transcriptional divergence among cells that had undergone their first division and identified previously unknown molecular determinants that controlled the fate specification of CD8 T lymphocytes. Our findings suggest a model for the differentiation of terminal effector cells initiated by an early burst of transcriptional activity and subsequently refined by epigenetic silencing of transcripts associated with memory lymphocytes, which highlights the power and necessity of single-cell approaches.