We report on a search for gravitational waves from coalescing compact binaries using LIGO and Virgo observations between July 7, 2009, and October 20, 2010.We searched for signals from binaries with total mass between 2 and 25M; this includes binary neutron stars, binary black holes, and binaries consisting of a black hole and neutron star. The detectors were sensitive to systems up to 40 Mpc distant for binary neutron stars, and further for higher mass systems. No gravitational-wave signals were detected. We report upper limits on the rate of compact binary coalescence as a function of total mass, including the results from previous LIGO and Virgo observations. The cumulative 90\% confidence rate upper limits of the binary coalescence of binary neutron star, neutron star-black hole, and binary black hole systems are 1:3 104, 3:1 105, and 6:4 106 Mpc3 yr1, respectively. These upper limits are up to a factor 1.4 lower than previously derived limits. We also report on results from a blind injection challenge.