CD28 ligation provides critical signals that modulate activated T cell fate. In a human to mouse reverse-engineering approach, a single amino acid substitution adjacent to the C-terminal proline-rich domain created CD28^A210P mice with enhanced CD28 C-terminal signaling. CD28^A210P mice experienced pro-inflammatory responses to CD28 superagonist antibody, analogous to severe cytokine storm induced in a human clinical trial, with a striking increase of activated CD8 T cells. In acute and chronic viral infections, early activation and expansion of CD28^A210P CD8 effector and stem-like T cells increased leading to increased memory T cell generation following acute infection and increased stem-like T cells late in chronic infection, that were further increased by PD-L1 blockade. Analogous to chronic infection, CD28^A210P tumor-bearing mice had increased tumor infiltrating stem-like T cells, which delayed, but ultimately could not control tumor growth. Mechanistically, CD28 A210P enhanced JunB, IL-2, and inhibitory receptors driven by MEK1/2. Depletion of CD8 T cells or inhibition of MEK1/2 prevented the pro-inflammatory response to CD28 superagonist antibody in CD28^A210P mice without inhibiting Foxp3⁺ regulatory T cell expansion. Thus, ‘humanized’ PYAP mice reveal key roles for CD28 C-terminal signaling strength in CD8 activation, effector and stem-like differentiation, and maintenance of stem-like T cells during acute and chronic viral infection and cancer.