Aims: It is unclear whether early cardiac rhythm control is beneficial in patients with acute ischemic stroke and paroxysmal atrial fibrillation (PAF). We sought to investigate whether PAF self-termination and in-hospital sinus rhythm (SR) restoration is associated with improved outcome in ischemic stroke patients with PAF, compared to those with sustained atrial fibrillation (AF). Methods: Consecutive patients with first-ever acute stroke and confirmed PAF during hospitalization were followed for up to 10 years after the index stroke or until death. We investigated the association of in-hospital self-terminated PAF and PAF conversion to SR compared to sustained AF with 10-year all-cause mortality, stroke recurrence, and major adverse cardiovascular events (MACE). Cox regression analysis was performed to identify independent predictors of each outcome. Results: Among 297 ischemic stroke patients with in-hospital PAF detection, PAF was self-terminated in 87 (29.3%) patients, while 143 (48.1%) patients received antiarrhythmic medication in order to achieve PAF conversion to SR. During a median (Interquartile range, IQR) period of 28 (4–68) months, among patients with self-terminated PAF there were 13.5 deaths, 3.6 stroke recurrences, and 5.3 MACE per 100 patient-year while in patients who underwent medical PAF conversion there were 11.7 deaths, 4.6 stroke recurrences, and 5.8 MACE per 100 patient-year. Patients with sustained AF experienced 23.8 deaths, 8.7 stroke recurrences, and 13.9 MACE per 100 patient-years. In multivariable analysis, compared to patients with sustained AF, PAF self-termination was associated with significantly lower 10 years-risk of death (adjusted hazards ratio (adjHR): HR: 0.63, 95% Confidence interval: 0.40–0.96), stroke recurrence (adjHR: HR: 0.41, 95% CI: 0.19–0.91), and MACE (adjHR: 0.43, 95% CI: 0.23–0.81), while PAF medical conversion to SR was associated with lower 10 years-risk of death (adjHR: 0.65, 95% CI: 0.44–0.97) and MACE (adjHR: 0.56, 95% CI: 0.33–0.95). Discussion: This study showed that in-hospital PAF self-termination was associated with lower risk of 10-year mortality, stroke recurrence, and MACE, potentially attributed to the lower burden of AF, whereas in-hospital PAF conversion to SR was associated with lower risk of 10-year mortality and MACE. Conclusion: Early restoration of sinus rhythm is associated with improved survival and MACE in patients with acute ischemic stroke and PAF.