The effectiveness of influenza vaccination in reducing hospitalization of people with diabetes for influenza, pneumonia, or diabetic events during influenza epidemics was assessed in a case control study in Leicestershire, England. Cases were 80 patients on the Leicestershire Diabetes Register who were admitted and discharged from hospital with International Classification of Disease codes for pneumonia, bronchitis, influenza, diabetic ketoacidosis, coma and diabetes, without mention of complications, during the influenza epidemics of 1989–90 and 1993. One hundred and sixty-controls, who were not admitted to hospital during this period, were randomly selected from the Register. Immunization against influenza was assessed in 37 cases and 77 controls for whom consent was obtained to access their clinical notes and for whom notes were available. Significant association was detected between reduction in hospitalization and influenza vaccination during the period immediately preceding an epidemic. Multiple logistic regression analysis estimated that influenza vaccination reduced hospital admissions by 79% (95% CI 19–95%) during the two epidemics, after adjustment for potential confounders.