Expansion and differentiation of antigen-experienced PD-1(+)TCF-1(+) stem-like CD8(+) T cells into effector cells is critical for the success of immunotherapies based on PD-1 blockade(1-4). Hashimoto et al. have shown that, in chronic infections, administration of the cytokine interleukin (IL)-2 triggers an alternative differentiation path of stem-like T cells towards a distinct population of 'better effector' CD8(+) T cells similar to those generated in an acute infection(5). IL-2 binding to the IL-2 receptor alpha-chain (CD25) was essential in triggering this alternative differentiation path and expanding better effectors with distinct transcriptional and epigenetic profiles. However, constitutive expression of CD25 on regulatory T cells and some endothelial cells also contributes to unwanted systemic effects from IL-2 therapy. Therefore, engineered IL-2 receptor beta- and gamma-chain (IL-2R beta gamma)-biased agonists are currently being developed(6-10). Here we show that IL-2R beta gamma-biased agonists are unable to preferentially expand better effector T cells in cancer models and describe PD1-IL2v, a new immunocytokine that overcomes the need for CD25 binding by docking in cis to PD-1. Cis binding of PD1-IL2v to PD-1 and IL-2R beta gamma on the same cell recovers the ability to differentiate stem-like CD8(+) T cells into better effectors in the absence of CD25 binding in both chronic infection and cancer models and provides superior efficacy. By contrast, PD-1- or PD-L1-blocking antibodies alone, or their combination with clinically relevant doses of non-PD-1-targeted IL2v, cannot expand this unique subset of better effector T cells and instead lead to the accumulation of terminally differentiated, exhausted T cells. These findings provide the basis for the development of a new generation of PD-1 cis-targeted IL-2R agonists with enhanced therapeutic potential for the treatment of cancer and chronic infections.