Ovarian cancer is the deadliest gynecologic malignancy and is often diagnosed at late stages when malignant ascites has formed. Immunotherapy, including T cell therapies, is unsuccessful in treating ovarian cancer. Therefore, it is critical to understand the mechanisms of T cell dysfunction in ovarian cancer. Here, we use acellular ovarian cancer ascites (ascites) as an ex vivo model of human ovarian cancer to study T cell function. We find that ascites halts T cell cell-cycle entry, cytokine production, and metabolic rewiring. Using metabolomics, we show that long chain fatty acids (LCFAs) are enriched in ascites and negatively correlate with T cell proliferation. Delipidation (DL) of ascites can rescue T cell function in ascites, implicating lipids, including LCFAs, in mediating T cell dysfunction. Investigating T cell receptor (TCR) signaling in ascites, we find that activation is impaired as early as CD3ζ phosphorylation. To understand how lipids could influence this activation defect, we complete lipidomics and show that T cell lipid content is altered in ascites, including an increase in the plasma membrane phospholipid phosphatidylcholine. Using the lipid membrane dye C-Laurdan, we reveal that membrane order is disrupted in ascites. Despite this, high-resolution imaging shows that the immunological synapse (IS) can form in ascites, however, T cell receptor (TCR) clusters are smaller and less frequent within ISs. To account for this, we find that TCR recycling, which is crucial for proper TCR clustering and sustained T cell activation, is hampered in ascites. These defects are reversed in DL ascites, exposing lipids as responsible for activation defects. Thus, we show that ascites-derived lipids impair T cell function through disruption of critical nanoscale TCR recycling and clustering events, preventing T cell activation. Importantly, we show that T cells which are already activated are remarkably functional in ascites, indicating that pre-activated T cells can overcome these lipid-induced barriers, providing a promising strategy to improve T cell therapies for ovarian cancer.