Transgenic mice overexpressing the inflammatory cytokine TNF-α in the heart develop a progressive heart failure syndrome characterized by biventricular dilatation, decreased ejection fraction, decreased survival compared with non-transgenic littermates, and earlier pathology in males. TNF-α mice (TNF1.6) develop atrial arrhythmias on ambulatory telemetry monitoring that worsen with age and are more severe in males. We performed in vivo electrophysiological testing in transgenic and control mice, ex vivo optical mapping of voltage in the atria of isolated perfused TNF1.6 hearts, and in vitro studies on isolated atrial muscle and cells to study the mechanisms that lead to the spontaneous arrhythmias. Programmed stimulation induces atrial arrhythmias (n = 8/32) in TNF1.6 but not in control mice (n = 0/37), with a higher inducibility in males. In the isolated perfused hearts, programmed stimulation with single extra beats elicits reentrant atrial arrhythmias (n = 6/6) in TNF1.6 but not control hearts due to slow heterogeneous conduction of the premature beats. Lowering extracellular Ca²⁺ normalizes conduction and prevents the arrhythmias. Atrial muscle and cells from TNF1.6 compared with control mice exhibit increased collagen deposition, decreased contractile function, and abnormal systolic and diastolic Ca²⁺ handling. Thus abnormalities in action potential propagation and Ca²⁺ handling contribute to the initiation of atrial arrhythmias in this mouse model of heart failure.