Initiation of combination antiretroviral therapy (cART) reduces inflammation in HIV-infected (HIV+) individuals. Recent studies demonstrated that diffusion MRI based extracellular free water (FW) modeling can be sensitive to neuroinflammation. Here, we investigate the FW in HIV-infection, its temporal evolution, and its association with blood markers, and cognitive scores. Using 96 age-matched participants, we found that FW was significantly elevated in grey and white matter in cART-naïve HIV+ compared to HIV-uninfected (HIV-) individuals at baseline. These increased FW values positively correlated with neurofilament light chain (NfL) and negatively correlated with CD4 counts. FW in grey and white matter, as well as NfL decreased in the HIV+ after 12 weeks of cART treatment. No significant FW differences were noted between the HIV+ and HIV- cohorts at 1 and 2-year follow-up. Results suggest that FW elevation in cART-naïve HIV+ participants is likely due to neuroinflammation. The correlation between FW and NfL, and the improvement in both FW and NfL after 12 weeks of cART treatment further reinforces this conclusion. The longer follow-up at 1 and 2 years suggests that cART helped control neuroinflammation as inferred by FW. Therefore, FW could be used as a biomarker to monitor HIV-associated neuroinflammation.