HIV-1 disease progression is associated with persistent immune activation. However, the nature of this association is incompletely understood. Here, we investigated immune activation in the CD4 T cell compartment of chronically HIV-1 infected individuals from Rakai, Uganda. Levels of CD4 T cell activation, assessed as co-expression of PD-1, CD38 and HLA-DR, correlated directly to viral load and inversely to CD4 count. Deeper characterization of these cells indicated an effector memory phenotype with relatively frequent expression of Ki67 despite their PD-1 expression, and levels of these cells were inversely associated with FoxP3+ regulatory T cells. We therefore use the term deregulated effector memory (DEM) cells to describe them. CD4 T cells with a DEM phenotype could be generated by antigen stimulation of recall responses in vitro. Responses against HIV-1 and CMV antigens were enriched among the DEM CD4 T cells in patients, and the diverse Vβ repertoire of DEM CD4 T cells suggested they include diverse antigen-specificities. Furthermore, the levels of DEM CD4 T cells correlated directly to soluble CD14 (sCD14) and IL-6, markers of innate immune activation, in plasma. The size of the activated DEM CD4 T cell subset was predictive of the rate of disease progression, whereas IL-6 was only weakly predictive and sCD14 was not predictive. Taken together, these results are consistent with a model where systemic innate immune activation and chronic antigen stimulation of adaptive T cell responses both play important roles in driving pathological CD4 T cell immune activation in HIV-1 disease.