Pharmaceuticals that suppress HIV-1 viremia preserve CD4+ T cells and prevent AIDS. Nonetheless, HIV-1 infected people taking these drugs have chronic inflammation attributable to persistent disruption of intestinal barrier function with increased rates of cardiovascular mortality. To better understand the etiology of this inflammation we examined the effect of HIV-1 infection on innate lymphoid cells (ILCs). These innate immune counterparts of T cells lack clonotypic antigen receptors, classify according to signature transcription factors and cytokines, and maintain homeostasis in inflamed tissues. ILCs have been defined, in part, by the IL-7Rα, CD127. Here we report that the vast majority of type 1 and 3 ILCs in human adult and placental cord blood are in fact CD127-, as are colon lamina propria ILC1s and many ILC3s. Among ILCs, CD127-ILC1s were the major producer of inflammatory cytokines. In contrast to CD127+ILC3s, CD127-ILC3s did not produce IL-22, a cytokine that maintains epithelial barrier function. In HIV-1+ people taking antivirals that preserve CD4+ T cells, CD127-ILC1s and all homeostatic cytokine-producing CD127+ILCs were decreased in blood and colon. Common γ-chain cytokines that are reported to be elevated in response to HIV-1 infection caused JAK3-dependent downregulation of CD127 and converted CD127-ILC1s into NK cells with heightened cytolytic activity. Consistent with the recent report that human blood CD117+ILCs give rise to both ILC1s and NK cells, pseudotemporal clustering of transcriptomes from thousands of individual cells identified a developmental trajectory from CD127-ILC1s to memory NK cells that was defined by WNT-transcription factor TCF7. WNT inhibition prevented the cytokine-induced transition of CD127-ILC1 cells into memory NK cells. In HIV-1+ people, effector NK cells and TCF7+ memory NK cells were elevated, concomitant with reduction in CD127-ILC1s. These studies describe previously overlooked human ILC subsets that are significant in number and function, identify profound abnormalities in homeostatic ILCs that likely contribute to ongoing inflammation in HIV-1 infection despite control of viremia, provide explanation for increased memory NK cells in HIV-1 infection, and reveal functional plasticity of ILCs.