Significance There is an intense interest in immune reconstitution and immunotherapy to control and cure chronic infections. Yet, how the fundamental processes that are required to generate new T cells are affected by chronic viruses and how these permutations affect therapeutic reconstitution or underlie adverse disease sequelae are not well understood. We demonstrate that type I interferon signaling directly programs peripheral effector T cells to destroy thymic structure and function, leading to a catastrophic organ depletion. Moderate thymic reconstitution associated with immune exhaustion ultimately occurs, but continued ramifications in the efficacy of hematopoietic stem cell therapy to generate new antiviral T cells and to prevent escape of self-reactive T cells remain long term.