Influenza vaccine effect on the occurrence and severity of influenza virus infection in a population residing in nursing homes for the elderly was studied as a cohort study during an influenza A (H3N2) epidemic in Japan. Of 22462 individuals living in 301 welfare nursing homes, 10739 voluntarily received inactivated, sub-unit trivalent influenza vaccine in a programme supported by the Osaka Prefectural Government. There were statistically significantly fewer cases of influenza, hospital admissions due to severe infection, and deaths due to influenza in the vaccinated cohort compared to the unvaccinated controls. No serious adverse reactions to vaccination were recorded. Thus influenza vaccination is effective for preventing influenza disease in persons aged 65 years and over, and should be an integral part of the care of this population residing in nursing homes.