Innate lymphoid cells (ILCs) are critical for intestinal adaptation to microenvironmental challenges, and the gut mucosa is characterized by low oxygen. Adaptation to low oxygen is mediated by hypoxia-inducible transcription factors (HIFs), and the HIF-1α subunit shapes an ILC phenotype upon acute colitis that contributes to intestinal damage. However, the impact of HIF signaling in NKp46+ ILCs in the context of repetitive mucosal damage and chronic inflammation, as it typically occurs during inflammatory bowel disease, is unknown. In chronic colitis, mice lacking the HIF-1α isoform in NKp46+ ILCs show a decrease in NKp46+ ILC1s but a concomitant rise in neutrophils and Ly6Chigh macrophages. Single-nucleus RNA sequencing suggests enhanced interaction of mesenchymal cells with other cell compartments in the colon of HIF-1α KO mice and a loss of mucus-producing enterocytes and intestinal stem cells. This was, furthermore, associated with increased bone morphogenetic pathway-integrin signaling, expansion of fibroblast subsets, and intestinal fibrosis. In summary, this suggests that HIF-1α-mediated ILC1 activation, although detrimental upon acute colitis, protects against excessive inflammation and fibrosis during chronic intestinal damage.