The National Influenza Program aims to reduce serious morbidity and mortality from influenza by providing public funding for vaccination to at-risk groups. The Influenza Complications Alert Network (FluCAN) is a sentinel hospital-based surveillance program that operates at 14 sites in all states and territories in Australia. This report summarises the epidemiology of hospitalisations with confirmed influenza, estimates vaccine coverage and influenza vaccine protection against hospitalisation with influenza during the 2013 influenza season. In this observational study, cases were defined as patients admitted to one of the sentinel hospitals, with influenza confirmed by nucleic acid testing. Controls were patients who had acute respiratory illnesses who were test-negative for influenza. Vaccine effectiveness was estimated as 1 minus the odds ratio of vaccination in case patients compared with control patients, after adjusting for known confounders. During the period 5 April to 31 October 2013, 631 patients were admitted with confirmed influenza at the 14 FluCAN sentinel hospitals. Of these, 31% were more than 65 years of age, 9.5% were Indigenous Australians, 4.3% were pregnant and 77% had chronic co-morbidities. Influenza B was detected in 30% of patients. Vaccination coverage was estimated at 81% in patients more than 65 years of age but only 49% in patients aged less than 65 years with chronic comorbidities. Vaccination effectiveness against hospitalisation with influenza was estimated at 50% (95% confidence interval: 33%, 63%, P