Atwal had three birdies and six bogeys in a card that gave him a total of 151, one worse than his friend Tiger Woods, who also missed the cut with rounds of 77 and 73 at the PGA Championships at the Atlanta Athletic Club yesterday.
It was Atwal's fifth missed cut in five starts at Majors since 2004. Next week Atwal defends his PGA Tour title at Wyndham, where he became the first Indian ever to grab a PGA Tour title.
Jason Dufner shared the lead with rookie Keegan Bradley, a first-timer at a Major. Dufner had an eagle in his round of 65 and Bradley had a bogey-free 64.
Woods was a story by himself as he found bunkers, water and double bogeys more than ever in his career. In two rounds, he visited the bunker 22 times and found the water hazard four times and five double bogeys. It was only the third missed cut at a Major in his career and only his seventh missed cut in 227 starts on the PGA Tour.
Behind Dufner and Bradley, who are both at five-under 135, there were DA Points (67), John Senden (68), Jim Furyk (65) and Scott Verplank (69) at 136.
Luke Donald and Lee Westwood, world No. 1 and 2, are still around for the weekend. Westwood (68) was tied 14th at four shots behind leaders, while Donald (71) was tied 26th at 141.
Rory McIlroy, who hurt his wrist on hole number three on Thursday, went through the full round at 73, which included three three-putts.
Adam Scott, playing with Woods' former caddie, Steve Williams, was around at two-under after rounds of 69 and 69. He was tied 11th despite a double bogey on 18th and he was three behind the leaders.