People living with HIV have high burdens of chronic lung disease, lung cancers, and pulmonary infections despite antiretroviral therapy (ART). The rates of tobacco smoking by people living with HIV vastly exceed that of the general population. Furthermore, we showed that HIV can persist within the lung mucosa despite long-term ART. As CD8 T cell cytotoxicity is pivotal for controlling viral infections and eliminating defective cells, we explored the phenotypic and functional features of pulmonary versus peripheral blood CD8 T cells in ART-treated HIV+ and uninfected controls. Bronchoalveolar lavage fluid and matched blood were obtained from asymptomatic ART-treated HIV+ smokers (n = 11) and nonsmokers (n = 15) and uninfected smokers (n = 7) and nonsmokers (n = 10). CD8 T cell subsets and phenotypes were assessed by flow cytometry. Perforin/granzyme B content, degranulation (CD107a expression), and cytotoxicity against autologous Gag peptide-pulsed CD4 T cells (Annexin V+) following in vitro stimulation were assessed. In all groups, pulmonary CD8 T cells were enriched in effector memory subsets compared with blood and displayed higher levels of activation (HLA-DR+) and exhaustion (PD1+) markers. Significant reductions in proportions of senescent pulmonary CD28-CD57+ CD8 T cells were observed only in HIV+ smokers. Pulmonary CD8 T cells showed lower perforin expression ex vivo compared with blood CD8 T cells, with reduced granzyme B expression only in HIV+ nonsmokers. Bronchoalveolar lavage CD8 T cells showed significantly less in vitro degranulation and CD4 killing capacity than blood CD8 T cells. Therefore, pulmonary mucosal CD8 T cells are more differentiated, activated, and exhausted, with reduced killing capacity in vitro than blood CD8 T cells, potentially contributing to a suboptimal anti-HIV immune response within the lungs.