HIV-1 viremia has been shown to induce several phenotypic and functional abnormalities in natural killer (NK) cells. To assess immune defects associated with HIV viremia, we examined NK cell function, differentiation status, and phenotypic alterations based on expression of inhibitory and activating receptors on NK cells in HIV-1 subtype C chronically infected participants from Durban, South Africa. NK cell phenotypic profiles were characterized by assessing sialic acid-binding immunoglobulin-like lectin-7 (Siglec-7), NKG2A, and NKG2C markers on frozen peripheral blood mononuclear cells from viremic, antiretroviral therapy (ART)-naive HIV-1 chronically infected participants (n = 23), HIV-1 chronically infected participants who had been on combination antiretroviral therapy (cART) for at least 12 months (n = 23) compared with healthy donors (n = 23). NK cell differentiation was assessed by measurement of killer immunoglobulin receptor (KIR) and NKG2A expression; CD57 and CD107a measurements were carried out in HIV viremic and healthy donors. All phenotypic and functional assessments were analyzed by using multicolor flow cytometry. HIV-1-infected participants displayed greater frequencies of the CD56(-)CD16(+) (CD56negative) NK cell subset compared with healthy donors (p < .0001). Downregulation of Siglec-7 and NKG2A and upregulation of NKG2C were more pronounced in the CD56negative NK cell subset of viremic participants. The CD56negative subset demonstrated a differentiated (KIR(+)NKG2A(-)) phenotype with reduced CD57 expression and lower degranulation capacity in HIV-1-infected participants compared with healthy donors. HIV-1 infection induces the expansion of the CD56negative NK cell subset marked by altered receptor expression profiles that are indicative of impaired function and may explain the overall NK cell dysfunction observed in chronic HIV-1 infection.