In `stats::arima`, the first residual of an AR(1) model is obtained as a byproduct of the Kalman filter. Example for an AR(1) model: # generate 120 observations from an AR(1) model set.seed(123) y <- arima.sim(n = 120, model = list(ar=0.6)) # fit the model fit <- arima(y, order = c(1,0,0), include.mean = FALSE) # get the state space representaton of the fitted model and # run the Kalman filter ss <- makeARIMA(phi = coef(fit), theta = numeric(0), Delta = numeric(0)) kf <- KalmanRun(y = y, mod = ss) # residuals head(as.vector(residuals(fit))) # [1] 0.5017314 -0.5510861 1.7855220 0.5106597 -1.9551303 0.6932320 head(kf$resid) # [1] 0.5017314 -0.5510861 1.7855220 0.5106597 -1.9551303 0.6932320 all.equal(as.vector(residuals(fit)), kf$resid) # [1] TRUE For some introduction on how the Kalman filter operates on ARMA models you may see, for example, [this post](http://stats.stackexchange.com/questions/202903/start-up-values-for-the-kalman-filter/207805#207805).