Abstract CD8+CD57+ terminal effector T (TTE) cells are a component of marrow-infiltrating lymphocytes and may contribute to the altered immune responses in multiple myeloma (MM) patients. We analyzed TTE cells in the bone marrow (BM) and peripheral blood (PB) of age-matched controls and patients with monoclonal gammopathy of undetermined significance (MGUS), smoldering MM (SMM), and newly diagnosed (ND) MM using flow cytometry, mass cytometry, and FlowSOM clustering. TTE cells are heterogeneous in all subjects, with BM containing both CD69− and CD69+ subsets, while only CD69− cells are found in PB. Within the BM-TTE compartment, CD69− and CD69+ cells are found in comparable proportions in controls, while CD69− cells are dominant in MGUS and SMM and predominantly either CD69− or CD69+ cells in NDMM. A positive relationship between CD69+TTE and CD69−TTE cells is observed in the BM of controls, lost in MGUS, and converted to an inverse relationship in NDMM. CD69−TTE cells include multiple oligoclonal expansions of T-cell receptor/Vβ families shared between BM and PB of NDMM. Oligoclonal expanded CD69−TTE cells from the PB include myeloma-reactive cells capable of killing autologous CD38hi plasma cells in vitro, involving degranulation and high expression of perforin and granzyme. In contrast to CD69−TTE cells, oligoclonal expansions are not evident within CD69+TTE cells, which possess low perforin and granzyme expression and high inhibitory checkpoint expression and resemble T resident memory cells. Both CD69−TTE and CD69+TTE cells from the BM of NDMM produce large amounts of the inflammatory cytokines interferon-γ and tumor necrosis factor α. The balance between CD69− and CD69+ cells within the BM-TTE compartment may regulate immune responses in NDMM and contribute to the clinical heterogeneity of the disease.