Developing vaccines that promote CD8+ T cell memory is a challenge for infectious disease and cancer immunotherapy. TCF-1+ stem cell-like memory CD8+ T (TSCM) cells are important determinants of long-lived memory. Yet, the developmental requirements for TSCM cell formation are unclear. Here, we identify the temporal window for type I interferon receptor (IFNAR) blockade to drive TSCM cell generation following viral infection and mRNA-lipid nanoparticle vaccination. We reveal a reversible developmental trajectory where transcriptionally distinct TSCM cells emerged from a transitional precursor of exhausted T cellular state concomitant with viral clearance. TSCM cell differentiation correlated with T cell retention within the lymph node paracortex due to disrupted CXCR3 chemokine gradient formation. These effects were linked to increased antigen load and a counterintuitive increase in IFNγ, which controlled cell location. Vaccination with the IFNAR blockade promoted TSCM cell differentiation and enhanced protection against chronic infection. These findings propose an approach to vaccine design whereby modulation of inflammation promotes memory formation and function.