Influenza is the most important cause of acute respiratory illness leading to hospitalization among children during community epidemics. This illness can cause extensive nosocomial outbreaks with serious morbidity and mortality among specific groups of children. Paediatric patients with community-acquired influenza and healthcare workers are the main reservoir for the nosocomial spread of the virus. During epidemics in the community, testing for influenza should be requested in all children with compatible symptoms admitted in the hospital, and measures should be introduced for the prevention or early control of an outbreak. Recent advances in the management of influenza include rapid diagnoses based on antigen detection and the identification of the new neuraminidase inhibitors zanamivir and oseltamivir. Annual vaccination against influenza of children with high-risk conditions, their family members and healthcare workers is the principle measure for the prevention of nosocomial outbreaks. Although vaccination against influenza appears to be cost-effective at all ages in terms of prevention of illness, related hospitalizations, deaths, reduction of healthcare costs and productivity loss, vaccination coverage among target groups is limited.