HIV-1 replication within the central nervous system (CNS) impairs neurocognitive function and has the potential to establish persistent, compartmentalized viral reservoirs. The origins of HIV-1 detected in the CNS compartment are unknown, including whether cells within the cerebrospinal fluid (CSF) produce virus. We measured viral RNA+ cells in CSF from acutely infected macaques longitudinally and people living with early stages of acute HIV-1. Active viral transcription (spliced viral RNA) was present in CSF CD4+ T cells as early as four weeks post-SHIV infection, and among all acute HIV-1 specimens (N = 6; Fiebig III/IV). Replication-inactive CD4+ T cell infection, indicated by unspliced viral RNA in the absence of spliced viral RNA, was even more prevalent, present in CSF of >50% macaques and human CSF at ~10-fold higher frequency than productive infection. Infection levels were similar between CSF and peripheral blood (and lymph nodes in macaques), indicating comparable T cell infection across these compartments. In addition, surface markers of activation were increased on CSF T cells and monocytes and correlated with CSF soluble markers of inflammation. These studies provide direct evidence of HIV-1 replication in CD4+ T cells and broad immune activation in peripheral blood and the CNS during acute infection, likely contributing to early neuroinflammation and reservoir seeding. Thus, early initiation of antiretroviral therapy may not be able to prevent establishment of CNS viral reservoirs and sources of long-term inflammation, important targets for HIV-1 cure and therapeutic strategies.