Rotavirus is a common cause of acute gastroenteritis in young children. Two rotavirus vaccines with demonstrated safety and efficacy in large scale clinical trials have recently received universal funding in Australia. We modelled specific outcomes of disease (hospitalisations, emergency department visits, general practitioner visits, and deaths) and examined the effectiveness and cost-effectiveness of both vaccines in the Australian context. From the healthcare payer perspective, the base-case showed only slightly different results for the two vaccines (Rotarix would cost $60,073/QALY gained and RotaTeq $67,681/QALY gained). From a societal perspective both vaccines were found to be cost saving under base-case assumptions. Rotavirus vaccination could be considered a cost-effective health intervention in Australia, however, the cost-effectiveness ratio depends heavily on several parameters, most notably the appropriate scope of the quality of life impact (that of the child, and one or both caregivers), as well as the negotiated vaccine price for a routine program.