We present the first results of an all-sky search for continuous gravitational waves from unknown spinning neutron stars in binary systems using LIGO and Virgo data. Using a specially developed analysis program, the TwoSpect algorithm, the search was carried out on data from the sixth LIGO science run and the second and third Virgo science runs. The search covers a range of frequencies from 20 Hz to 520 Hz, a range of orbital periods from 2 to ∼2,254h and a frequency- and period-dependent range of frequency modulation depths from 0.277 to 100 mHz. This corresponds to a range of projected semimajor axes of the orbit from ∼0.6×10-3ls to ∼6,500ls assuming the orbit of the binary is circular. While no plausible candidate gravitational wave events survive the pipeline, upper limits are set on the analyzed data. The most sensitive 95% confidence upper limit obtained on gravitational wave strain is 2.3×10-24 at 217 Hz, assuming the source waves are circularly polarized. Although this search has been optimized for circular binary orbits, the upper limits obtained remain valid for orbital eccentricities as large as 0.9. In addition, upper limits are placed on continuous gravitational wave emission from the low-mass x-ray binary Scorpius X-1 between 20 Hz and 57.25 Hz.