Tumour mutational burden (TMB) predicts immunotherapy outcome in non-small cell lung cancer (NSCLC), consistent with immune recognition of tumour neoantigens. However, persistent antigen exposure is detrimental for T cell function. How TMB affects CD4 and CD8 T cell differentiation in untreated tumours, and whether this affects patient outcomes is unknown. Here we paired high-dimensional flow cytometry, exome, single-cell and bulk RNA sequencing from patients with resected, untreated NSCLC to examine these relationships. TMB was associated with compartment-wide T cell differentiation skewing, characterized by loss of TCF7-expressing progenitor-like CD4 T cells, and an increased abundance of dysfunctional CD8 and CD4 T cell subsets, with significant phenotypic and transcriptional similarity to neoantigen-reactive CD8 T cells. A gene signature of redistribution from progenitor-like to dysfunctional states associated with poor survival in lung and other cancer cohorts. Single-cell characterization of these populations informs potential strategies for therapeutic manipulation in NSCLC.