As a result of insertions and deletions, a file tends to be cluttered with deleted records which are physically present. These unwanted records cause fragmentation within the file and give rise to additional access overhead because they have to be skipped over during processing. A connection between the dynamic fragmentation characteristics and the pattern of record insertions and deletions over time is presented, and performance degradation is studied in terms of the number of record accesses per reference. Deterioration characteristics are obtained for nonhomogeneous Poisson insertion and general deletion processes. For constant insertion rate, it is found that the deterioration over time is asymptotically linear, with the rate of decline governed by the record deletion rate. An expression for the optimum compaction interval is also given for files subject to a constant insertion rate and an exponentially distributed record lifetime.