Effects of unmodeled high frequency dynamics on stability and performance of adaptive control schemes are analyzed. In the regulation problem global stability properties are no longer guaranteed, but a region of attraction exists for exact adaptive regulation. The dependence of the region of attraction on unmodeled parasitics is examined first. Then the general case of model reference adaptive control is considered in which parasitics can destroy stability and boundedness properties. A more robust adaptive law is proposed, guaranteeing the existence of a region of attraction from which all signals converge to a residual set which contains the equilibrium for exact tracking. The size of this set depends on design parameters, the frequency range of parasitics and the reference input signal characteristics.