To evaluate the impact of the Australian rotavirus vaccination program on both rotavirus and all-cause acute gastroenteritis (AGE) hospitalisations and to compare outcomes in Indigenous and non-Indigenous people. Retrospective analysis of the Australian Institute of Health and Welfare National Hospital Morbidity database for hospitalisations coded as rotavirus and all-cause AGE, between 1 July 2001 and 30 June 2010. Age-specific hospitalisation rates in Indigenous and non-Indigenous people, before and after the introduction of the vaccine program in July 2007. There was a 71% decline in rotavirus-coded hospitalisations of children aged < 5 years between periods before and after rotavirus vaccination (from 261 per 100,000 to 75 per 100,000). There was also a 38% decline in non-rotavirus coded AGE hospitalisations (from 1419 per 100,000 to 880 per 100,000). This represented more than 7700 hospitalisations of children aged < 5 years being averted in the financial year 2009-10. Reductions were also observed in the 5-19-years age group, suggesting that transmission of virus was reduced at a population level. Decreases in hospitalisations of Indigenous children were smaller than those for the general population, and fluctuated by location and year. These data show a sustained and substantial decline in severe rotavirus disease and all-cause AGE since the introduction of rotavirus vaccination, most pronounced in the target age group, but with evidence of herd immunity. The impact of rotavirus vaccination in Indigenous children in hyperendemic settings was less remarkable.