Postoperative atrial fibrillation (POAF) is a common, expensive and potentially morbid complication following cardiac surgery. POAF occurs in around 35% of cardiac surgery cases and has a peak incidence on postoperative day 2. Patients who develop POAF incur on average $10 000–$20 000 in additional hospital treatment costs, 12–24 h of prolonged ICU time, and an additional 2 to 5 days in the hospital. POAF has been identified as an independent predictor of numerous adverse outcomes, including a 2- to 4-fold increased risk of stroke, reoperation for bleeding, infection, renal or respiratory failure, cardiac arrest, cerebral complications, need for permanent pacemaker placement, and a 2-fold increase in all-cause 30-day and 6-month mortality. The pathogenesis of POAF is incompletely understood but likely involves interplay between pre-existing physiological components and local and systemic inflammation. POAF is associated with numerous risk factors including advanced age, pre-existing conditions that cause cardiac remodelling and certain non-cardiovascular conditions. Clinical management of POAF includes both prophylactic and therapeutic measures, although the efficacy of many interventions remains in question. This review provides a comprehensive and up-to-date summary of the pathogenesis of POAF, outlines current clinical guidelines for POAF prophylaxis and management, and discusses new avenues for further investigation.