CD4 T cell effector function is required for optimal containment of Mycobacterium tuberculosis (Mtb) infection. IFNɣ produced by CD4 T cells is a key cytokine that contributes to protection. However, lung-infiltrating CD4 T cells have a limited ability to produce IFNɣ, and IFNɣ plays a lesser protective role within the lung than at sites of Mtb dissemination. In a murine infection model, we observed that IFNɣ production by Mtb-specific CD4 T cells is rapidly extinguished within the granuloma but not within unaffected lung regions, suggesting localized immunosuppression. We identified a signature of TGFβ signaling within granuloma-infiltrating T cells in both mice and rhesus macaques. Selective blockade of TGFβ signaling in T cells resulted in an accumulation of terminally differentiated effector CD4 T cells, improved IFNɣ production within granulomas, and reduced bacterial burdens. These findings uncover a spatially localized immunosuppressive mechanism associated with Mtb infection and provide potential targets for host-directed therapy.