Glycolysis and mitochondrial fatty acid oxidation (FAO) regulate CD8+ T cell differentiation fate. However, how glycolysis and FAO balance are associated with T-cell exhaustion remains unknown. PD-1 signal inhibits glycolysis and enhances FAO. We find that CD8+ T cells in the tumors adhered to glycolysis with attenuated FAO despite high PD-1 expression, which was defined as “metabolic exhaustion.” Active aldehydes, final products of lipid peroxidation, accumulate in CD8+ T cells in proportion to their exhaustion depth in mouse and human tumor tissues. Active aldehydes strongly promote glycolysis and inhibit the FAO activity in T cells. Mice deficient for an FAO enzyme, specifically in T cells, generate more active aldehydes, enhancing T-cell exhaustion and attenuating anti-tumor immunity. Super-resolution microscopy analysis reveals that active aldehydes are primarily generated from mitochondria in the exhausted T cells, which is associated with mitochondrial damage. Inhibitors of lipid peroxidation or active aldehydes enhanced the anti-tumor effect of the PD-1 blockade therapy by rectifying metabolic exhaustion. Therefore, active aldehydes resulting from FAO impairment cause a vicious cycle of metabolic imbalance that leads to T cell exhaustion.