BACKGROUND Nonrheumatic atrial fibrillation (AF) is a common cause of embolic stroke. Warfarin therapy can reduce stroke risk by two-thirds in patients with AF, but therapy may not always be used or always be used optimally. OBJECTIVES This study sought to document the patterns of anticoagutant use and the determinants and incidence of stroke, intracranial hemorrhage, and arterial thromboembolism in US patients with AF. METHODS Using health insurance claims and Laboratory results, we examined events per unit of person-time and used Poisson regression to quantify the association of AF outcomes with the international normalized ratio (INR) and other covariates. RESULTS In 116,969 patients age >= 40 years with an insurance claim for AF or atrial flutter between 1999 and 2005, warfarin was prescribed to 45%, and 48% had no claim for any anticoagulant or antiplatelet agent. Subtherapeutic INR levels (<2.0) raised the incidence of stroke (relative risk [RR]: 2.39, 95% confidence interval [CI]: 1.68 to 3.41) and arterial thromboembolism (RR: 5.68, 95% CI: 1.88 to 17.10) compared with therapeutic INR Levels, whereas supratherapeutic INR levels (>3.0) doubled the incidence of intracranial hemorrhage (RR: 2.11, 95% CI: 1.16 to 3.84). Further covariate adjustment had little effect on these estimates. CONCLUSION Warfarin remains underused within the outpatient setting. Nontherapeutic INR Levels are associated with increased risk of stroke, bleeding, and thromboembolism compared with therapeutic INR Levels.