The small intestinal (SI) epithelium harbors a heterogeneous population of lymphocytes that mediate mucosal damage and repair in celiac disease (CD). The composition and roles of human proximal SI intra-epithelial innate lymphoid cells (ILCs), and their alterations in CD, are not well understood. We report that duodenal intra-epithelial ILCs predominantly consist of natural killer (NK)p44 + CD127 − cytotoxic ILC1s and NKp44 − CD127 + helper ILC1s, while ILC3s only represent a minor population. In patients with newly diagnosed or active CD (ACD) and refractory CD type 1 (RCD I), the frequency of SI NKp44 + ILCs is decreased, with restoration of NKp44 + ILC frequency observed in patients adhering to a gluten-free diet who show evidence of mucosal healing. Moreover, the frequency of SI NKp44 − ILCs is increased in ACD and RCD I patients and correlates with the severity of villous atrophy and epithelial damage, as assessed by serum levels of fatty acid binding protein 2 (FABP2). We show that the ILC alterations in CD represent a phenotypic shift of cytotoxic ILC1s rather than an increase in helper ILC1s or transdifferentiation of ILC1s to ILC3s, and activation-induced loss of NKp44 by cytotoxic ILC1s is associated with increased interferon (IFN)-γ expression and release of lytic granules. These findings suggest that intra-epithelial NKp44 − CD127 − cytotoxic ILC1s may contribute to mucosal damage in CD.