Does pesto go bad?

I believe that the best indicator of freshness is the colour of the leaves. Once they turn from green to brown, it is all over for the pesto.

To boost the 'shelf-life' of the pesto in the fridge, make sure that it is completely covered with olive oil before sealing the container.

In regards to the part of the question asking about storage lifetime, and with respect to the other answers on this question: pesto is a low acid food at risk for botulism:

• It contains garlic, which is harvested out of the ground, so may have spores (as might the basil leaves, but less likely)
• Underneath the oil layer is anoxic (no access to oxygen from the air), which is necessary for botulism growth.

Therefore, pesto should not be stored for very long (whether home made or after a commercially canned product is opened) unless frozen.

Per the University of Georgia's National Center for Home Food Preservation which is admittedly focused on canning, but note the instructions on using fresh product as well (emphasis added):

How do I can oil with herbs? Can I can pesto?

Herbs and oils are both low-acid and together could support the growth of the disease-causing Clostridium botulinum bacteria. Oils may be flavored with herbs if they are made up for fresh use, stored in the refrigerator and used within 2 to 3 days. There are no canning recommendations. Fresh herbs must be washed well and dried completely before storing in the oil. The very best sanitation and personal hygiene practices must be used. Pesto is an uncooked seasoning mixture of herbs, usually including fresh basil, and some oil. It may be frozen for long term storage; there are no home canning recommendations.

Commercial pesto (at least some brands) is said to keep about a year unopened, and 5-7 days in the fridge after opening.

as in most cases, the answer is "it depends". If this is a commercial product, it has probably been pasteurized. It will also feature a "best before" date. It also depends on whether this was designed to be stored at room temperature or in the fridge. What can go wrong? The olive oil can go rancid, the basil can spoil (particularly if parts of it are exposed to air).

On the other hand, if it is random pesto made by a friend of yours, ditch it. The fact that you are asking the question indicates that it has already been there for too long. In the Italian tradition, pesto is not a "keeping" sauce. It is made right before use - and of course if it is good there are no leftovers...

Commercial pesto certainly doesn't keep that long in the fridge after it's been opened. My current bottle says 2 weeks. My last bottle started growing mould after about 6 weeks!

It should keep substantially longer before it's opened, but most commercial bottles should have advice about storage length on the label.

I have used pesto a month or more after making with no problems. Just refrigerate and I would say it is okay. This pesto contained only basil, parsley, olive oil, salt, pepper, pine nuts and garlic.

I've been cooking commercially for 10 years

Basil is one of the fastest herbs to decay. I recommend freezing leftover pesto in an air tight package. It's easy to thaw and if the container is airtight, flavor won't be compromised.