An empirical relationship between climatological sea surface temperature (SST) and the maximum intensity of tropical cyclones in the North Atlantic basin is developed from a 31-year sample (1962-1992). This relationship is compared with the theoretical results described by Emanuel. The theoretical results are in agreement with the observations over a wide range of SST, provided that the tropopause temperature is assumed to be a function of SST. Each storm is examined to determine how close the observed intensity comes to the maximum possible intensity (MPI). Results show that only about 20% of Atlantic tropical cyclones reach 80% or more of their MPI at the time when they are the most intense. On average, storms reach about 55% of their MPI. Storms that are farther west and farther north tend to reach a larger fraction of their MPI. Storms are also more likely to reach a larger fraction of their MPI in August-November than in June-July. There is considerable interannual variability in the yearly average of the ratio of the observed maximum intensity to the MPI.