A cluster-randomised controlled trial of antiviral treatment to control influenza outbreaks in aged-care facilities (ACFs) provided an opportunity to assess VE in the frail, institutionalised elderly. Data were pooled from five influenza outbreaks in 2007. Rapid testing methods for influenza were used to confirm outbreaks and/or identify further cases. Vaccination coverage among ACF residents ranged from 59% to 100%, whereas it was consistently low in staff (11-33%). The attack rates for laboratory-confirmed influenza in residents ranged from 9% to 24%, with the predominate strain determined to be influenza A. Sequencing of the hemagglutinin gene from a sub-sample demonstrated an incomplete match with the 2007 southern hemisphere influenza vaccine. Influenza VE was estimated to be 61% (95%CI 6%, 84%) against laboratory-confirmed influenza, 51% (95%CI -16%, 79%) against influenza-like illness, 82% (95%CI 27%, 96%) against pneumonia-related and influenza-related hospitalisations and 71% (95%CI -28%, 95%) against death from all causes. This supports the continued policy of targeted vaccination of the institutionalised, frail elderly. There is also reassurance that influenza vaccine can be effective against disease and severe outcomes, despite an incomplete vaccine match. This benefit is additional to protection from antivirals.