We assessed the burden of rotavirus infection-related disease, in terms of hospitalization and associated costs, at 3 sentinel hospitals in Akita prefecture, Japan. From January 2001 through December 2002, a total of 443 children <5 years of age were hospitalized for acute gastroenteritis. Of 422 stool specimens collected, 244 (58%) tested positive for rotavirus. Only 7.8% of the rotavirus disease-associated hospitalizations involved infants <6 months of age, whereas most cases of disease (39%) were reported in the second year of life, and 89% of cases had occurred by 36 months of age. The mean severity score for rotavirus gastroenteritis resulting in hospitalization was 16.5, according to the modified 20-point severity scoring system. The average associated direct medical cost was 136,000 ¥ (US $1236) per case and was similar among the 3 hospitals. The estimated incidence of rotavirus disease-associated hospitalizations among children <5 years of age was 7.9–17.6 hospitalizations/1000 person-years, and the estimated cumulative incidence by 5 years of age was 6.6%. Thus, ∼1 in 15 children will require hospitalization due to rotavirus diarrhea by their fifth year of life. In Japan, this would mean that 78,000 children <5 years of age would be hospitalized each year, resulting in a direct medical cost of 10 billion ¥ (US $96 million). The burden associated with rotavirus gastroenteritis in Japan is substantial and might be reduced through the introduction of vaccines.