Pancreatic ductal adenocarcinoma (PDA) is a lethal cancer characterized by a suppressive tumor microenvironment (TME) including elevated levels of TGFß. The adoptive transfer of T cell receptor (TCR) engineered T cells specific to mesothelin (Msln) can effectively target PDA, but efficacy is limited by the suppressive TME that promotes engineered T cell dysfunction. T cell receptor (TCR) transgenic mice represent an invaluable tool to study antigen-specific immune responses. In the pre-existing models, a monoclonal TCR is driven by a non-physiologic promoter and randomly integrated into the genome. Here, we create a highly efficient methodology to develop T cell receptor exchange (TRex) mice, in which TCRs, specific to the self/tumor antigen mesothelin (Msln), are integrated into the Trac locus, with concomitant Msln disruption to circumvent T cell tolerance. We show that high affinity TRex thymocytes undergo all sequential stages of maturation, express the exogenous TCR at DN4, require MHC class I for positive selection and undergo negative selection only when both Msln alleles are present. By comparison of TCRs with the same specificity but varying affinity, we show that Trac targeting improves functional sensitivity of a lower affinity TCR and confers resistance to T cell functional loss. By generating P14 TRex mice with the same specificity as the widely used LCMV-P14 TCR transgenic mouse, we demonstrate increased avidity of Trac-targeted TCRs over transgenic TCRs, while preserving physiologic T cell development. To test the hypothesis that TGFß is a major driver of engineered T cell dysfunction in PDA, we knocked out Tgfbr2 using CRISPR/Cas9 in in vitro activated Msln-specific TRex cells. The loss of Tgfbr2 signaling in high affinity (1045) Msln-specific TRex T cells drive increases in markers of effector T cells such as Klrg1, Cxcr3, and CD44. When transferred into orthotopic PDA tumor bearing mice, both Tgbr2-WT and Tgbr2-/- engineered T cells traffic to tumors driven by increased frequency and number of cDC1 and cDC2 dendritic cells. With vaccination, the engineered T cells cause a 10-fold reduction in tumor weight at day 13 post tumor and are highly proliferative. Tumor infiltrating Tgbr2-/- cells upregulated IFNy, TNFα, and Granzyme b and decreased markers of terminal exhaustion PD-1 and Lag3. Our studies suggest, interfering with TGFß signaling can alter T cell fate prior to transfer and maintain effector differentiation within the TME promoting cytotoxic Klrg1+ T cells at the expense of PD-1+ exhausted T cells and leading to tumor control.