Natural fractures in reservoirs play an important role in determining fluid flow during production, and hence the density and orientation of fractures is of great interest. In the presence of aligned vertical fractures, the reflection amplitude at finite offset varies with azimuth. The effect of natural fractures on the azimuthal AVO response from a gas‐sandstone reservoir encased within shale is investigated. A simple expression for the difference in P‐wave reflection coefficient from the top of the reservoir parallel and perpendicular to the strike of the fractures is obtained in terms of the normal and tangential compliances, ZN and ZT, of the fractures. This expression is valid for small anisotropy and material contrasts and is compared with the results of numerical modelling. For a given value of ZT, the azimuthal variation in reflection coefficient at moderate offsets is found to increase with decreasing ZN/ZT. For gas‐filled open fractures ZN/ZT ≈ 1, but a lower ratio of ZN/ZT may result from the presence of cement or clay within the fractures, or from the presence of a fluid with non‐zero bulk modulus. For ZN/ZT = 1 and moderate offsets, the variation with offset of the reflection coefficient from the top of the fractured unit is dominated by the contrast in Poisson's ratio between the gas sand and the overlying shale, the effect of fractures only becoming noticeable as the critical angle for the unfractured sandstone is approached. However, for reflections from the base of the fractured unit, the variation in reflection amplitude with azimuth is much greater at conventional seismic offsets than for the reflection from the top. Azimuthal variations in the strength of the reflection from the top of the reservoir depend only on the variation in reflection coefficient, whereas the raypath is also a function of azimuth for reflections from the base of the fractured unit, leading to stronger, more visible, variations of AVO with azimuth. It follows that an azimuthal variation in AVO due to fractures in the overburden may be misinterpreted as due to the presence of aligned fractures in the reservoir.