HIV-1-infected people who take medications that suppress viremia, preserve CD4+ T cells, and prevent AIDS, have chronic inflammation with increased cardiovascular mortality. To investigate the etiology of this inflammation, the effect of HIV-1 on innate lymphoid cells (ILCs) and NK cells was examined. Homeostatic ILCs in blood and intestine were depleted permanently. NK cells were skewed towards a memory subset. Cytokines that are elevated during HIV-1 infection reproduced both abnormalities ex vivo. Pseudotime analysis of single NK cell transcriptomes revealed a developmental trajectory towards a subset with expression profile, chromatin state, and biological function like memory T lymphocytes. Expression of TCF7, a WNT transcription factor, increased over the course of the trajectory. TCF7 disruption, or WNT inhibition, prevented memory NK cell induction by inflammatory cytokines. These results demonstrate that inflammatory cytokines associated with HIV-1 infection irreversibly disrupt homeostatic ILCs and cause developmental shift towards TCF7+ memory NK cells.