NK cells play an integral role in the innate immune response by targeting virally infected and transformed cells with direct killing and providing help to adaptive responses through cytokine secretion. Whereas recent studies have focused on NK cells in HIV-1-infected adults, the role of NK cells in perinatally HIV-1-infected children is less studied. Using multiparametric flow cytometric analysis, we assessed the number, phenotype, and function of NK cell subsets in the peripheral blood of perinatally HIV-1-infected children on highly active antiretroviral therapy and compared them to perinatally exposed but uninfected children. We observed an increased frequency of NK cells expressing inhibitory killer Ig-like receptors in infected children. This difference existed despite comparable levels of total NK cells and NK cell subpopulations between the two groups. Additionally, NK cell subsets from infected children expressed, with and without stimulation, significantly lower levels of the degranulation marker CD107, which correlates with NK cell cytotoxicity. Lastly, increased expression of KIR2DL3, NKG2C, and NKp46 on NK cells correlated with decreased CD4+ T-lymphocyte percentage, an indicator of disease severity in HIV-1- infected children. Taken together, these results show that HIV-1-infected children retain a large population of cytotoxically dysfunctional NK cells relative to perinatally exposed uninfected children. This reduced function appears concurrently with distinct NK cell surface receptor expression and is associated with a loss of CD4+ T cells. This finding suggests that NK cells may have an important role in HIV-1 disease pathogenesis in HIV-1-infected children.