Objective: To describe the epidemiology of severe rotavirus gastroenteritis and to estimate the hospitalisation rates of this illness in New Zealand children under 3 years of age. Methods: Children under 3 years of age with acute diarrhoea admitted to 1 of 8 study hospitals between 1 May 1998 and 30 April 2000 were surveyed. Their socio-demographic, treatment and length-of-stay data were recorded and stool samples tested by a rotavirus-specific enzyme-linked immunoassay. National hospital discharge data for infectious diarrhoea (International Classification of Diseases, ninth revision, 003–009) were reviewed, allowing population-based estimates for rotavirus-related hospitalisation in New Zealand. Results: Of 2019 enrolled children, 1138 (56.4%) provided stools for testing, and of these 485 (42.6%) tested rotavirus positive. Rotavirus detection varied significantly by age (26.8% for 0 to 5 months, 42.5% for 6 to 11 months and 52.1% for children aged 12 to 35 months; P