Mozambique introduced monovalent rotavirus vaccine (Rotarix®) in September 2015. We evaluated the effectiveness of Rotarix® under conditions of routine use in Mozambican children hospitalized with acute gastroenteritis (AGE). A test negative case-control analysis was performed on data collected during 2017–2019 from children <5 years old, admitted with AGE in seven sentinel hospital sites in Mozambique. Adjusted VE was calculated for ≥1 dose of vaccine vs. zero doses using unconditional logistic regression, where VE = (1 − aOR) × 100%. VE estimates were stratified by age group, AGE severity, malnutrition, and genotype. Among 689 children eligible for analysis, 23.7% were rotavirus positive (cases) and 76.3% were negative (controls). The adjusted VE of ≥1 dose in children aged 6–11 months was 52.0% (95% CI, −11, 79), and −24.0% (95% CI, −459, 62) among children aged 12–23 months. Estimated VE was lower in stunted than non-stunted children (14% (95% CI, −138, 66) vs. 59% (95% CI, −125, 91)). Rotavirus vaccination appeared moderately effective against rotavirus gastroenteritis hospitalization in young Mozambican children. VE point estimates were lower in older and stunted children, although confidence intervals were wide and overlapped across strata. These findings provide additional evidence for other high-mortality countries considering rotavirus vaccine introduction.