Current drug development efforts for the treatment of atrial fibrillation are hampered by the fact that many preclinical models have been unsuccessful in reproducing human cardiac physiology and its response to medications. In this study, we demonstrated an approach using human induced pluripotent stem cell‐derived atrial and ventricular cardiomyocytes (hiPSC‐aCMs and hiPSC‐vCMs, respectively) coupled with a sophisticated optical mapping system for drug screening of atrial‐selective compounds in vitro. We optimized differentiation of hiPSC‐aCMs by modulating the WNT and retinoid signaling pathways. Characterization of the transcriptome and proteome revealed that retinoic acid pushes the differentiation process into the atrial lineage and generated hiPSC‐aCMs. Functional characterization using optical mapping showed that hiPSC‐aCMs have shorter action potential durations and faster Ca2+ handling dynamics compared with hiPSC‐vCMs. Furthermore, pharmacological investigation of hiPSC‐aCMs captured atrial‐selective effects by displaying greater sensitivity to atrial‐selective compounds 4‐aminopyridine, AVE0118, UCL1684, and vernakalant when compared with hiPSC‐vCMs. These results established that a model system incorporating hiPSC‐aCMs combined with optical mapping is well‐suited for preclinical drug screening of novel and targeted atrial selective compounds.