Aims Little is known about rural-urban differences in the treatment and outcomes in patients with atrial fibrillation (AF). We aimed to assess whether the initiation of oral anticoagulant (OAC) therapy in patients with AF differs between those with rural and urban residence. Methods The registry-based FinACAF cohort covers all patients with AF from all levels of care in Finland. Patients were divided into rural and urban categories and into urbanization degree tertiles based on their municipality of residence at the time of AF diagnosis. The outcome was the first redeemed OAC prescription. Results We identified 222 419 patients (50.1% female; mean age 72.8 (SD 13.2) years) with incident AF during 2007–2018. Urban residence was associated with a lower rate of OAC therapy initiation (adjusted subdistribution hazard ratio (SHR) (95% CI) 0.96 (0.95–0.97)). Correspondingly, an inverse graded dose-response relationship was observed between higher urbanization degree tertile and OAC initiation rate (highest tertile compared to lowest: adjusted SHR (95% CI) 0.94 (0.93–0.95)). The adoption of direct oral anticoagulants for stroke prevention was faster among patients with urban residence. Conclusion This nationwide cohort study documented that urban residence is associated with a slightly lower rate of OAC therapy initiation in patients with incident AF, but faster adoption of direct oral anticoagulant use.