T cells can acquire a broad spectrum of differentiation states following activation. At the extreme ends of this continuum are short-lived cells equipped with effector machinery and more quiescent, long-lived cells with heightened proliferative potential and stem cell-like developmental plasticity. The latter encompass stem-like exhausted T cells and memory T cells, both of which have recently emerged as key determinants of cancer immunity and response to immunotherapy. Here, we discuss key similarities and differences in the regulation and function of stem-like exhausted CD8⁺ T cells and memory CD8⁺ T cells, and consider their context-specific contributions to protective immunity in diverse outcomes of cancer, including tumour escape, long-term control and eradication. Finally, we emphasize how recent advances in the understanding of the molecular regulation of stem-like exhausted T cells and memory T cells are being explored for clinical benefit in cancer immunotherapies such as checkpoint inhibition, adoptive cell therapy and vaccination.