China has the second largest birth cohort in the world and the second highest number of deaths due to rotavirus infection. It is also the only country with a licensed rotavirus vaccine. Chinese policy makers now need credible estimates of the burden of rotavirus disease, to decide about vaccine use. From August 2001 through July 2003, prospective hospital-based surveillance for rotavirus diarrhea among children <5 years of age was conducted in 6 sentinel hospitals. Rotavirus isolates were characterized to determine the G and P genotypes circulating during the study. Of 3149 children who were admitted to the hospitals for diarrhea and for whom screening for rotavirus was performed, 1590 (50%) had positive results of an antigen detection assay. Of all episodes of rotavirus diarrhea, 95% occurred during the first 2 years of life. The most common rotavirus strain was P[8]G3 (49% of episodes), and all the common strains were detected, including G9 strains (4% of episodes). Ongoing efforts are under way to more precisely define the burden of rotavirus diarrhea in urban and rural populations, to assess the proportion of episodes that may be due to unusual or emerging strains, and to estimate the economic burden of rotavirus disease.