OBJECTIVE To estimate the number of children under five years of age hospitalised for rotavirus gastroenteritis in New South Wales. METHODS Retrospective survey with comparison of patterns of hospital admissions for acute gastroenteritis in children under five with laboratory reports of rotavirus infection. METHODS New South Wales, January 1991-December 1993. METHODS Laboratory reports of rotavirus infection to the Eastern Sydney Laboratory Surveillance Program (a voluntary laboratory reporting scheme) and hospital admissions of children under five with principal diagnosis classified under international classification of diseases, 9th revision, clinical modification (ICD-9-CM) codes 008.6, 008.8, 009.0-009.3 and 558.9 from NSW Inpatient Statistics Collection. RESULTS Rotavirus infections were reported throughout each year (mean, 57 reports per month), with incidence peaks in August or September. Admissions for gastroenteritis showed the same seasonal pattern (correlation coefficient, 0.93). About 3700 children under five were admitted for rotavirus gastroenteritis annually in NSW at an estimated annual cost of 4.6 million dollars. Annual rates were highest for children aged 12-23 months (1800 per 100000 population in age group), intermediate for those aged 0-11 and 24-35 months (810 and 1000 per 100000 in age group, respectively) and lowest for those aged 36-47 and 48-59 months (450 and 190 per 100000 population, respectively, in age group). CONCLUSIONS Rotavirus is a major cause of morbidity among young children in NSW. Routine infant vaccination against rotavirus could reduce this morbidity and the resulting health costs.