Inertial Electrostatic Confinement (IEC) is one of the earliest plasma confinement concepts, having first been suggested by P. T. Farnsworth in the 1950s. The concept involves a simple apparatus of concentric spherical electrostatic grids or a combination of grids and magnetic fields. An electrostatic structure is formed from the confluence of electron or ion beams.Gridded IEC systems have demonstrated neutron yields as high as 2*1010 neutron/sec. These systems have considerable potential as small, inexpensive, portable neutron sources for assaying applications. Neutron tomography is also a potential application.Atomic physics effects strongly influence the performance of all of these systems. Important atomic effects include elastic scattering, ionization, excitation, and charge exchange. This paper discusses how an IEC system is influenced by these effects and how to design around them. Theoretical modeling and experimental results are presented.