OBJECTIVE - To assess whether the influenza vaccination of community-dwelling, diabetic, elderly individuals is associated with reduced rates of hospitalization and death. RESEARCH DESIGN AND METHODS - In this outcome-research study, we compared mortality and hospitalization rates of 15,556 patients aged ≥65 years followed using a diabetes registry in a large health maintenance organization to that of 69,097 members not suffering from chronic disease who were considered as a reference group. The study outcomes included all-cause death and hospitalization in internal medicine or geriatric wards for any reason over winter and summer (control) periods. RESULTS - Vaccination rates were 48.8 and 42.0% among patients with diabetes and the reference population, respectively. Influenza vaccination was associated with a 12.3% reduction in hospitalization rates for patients with diabetes compared with 23.0% in the reference group (P = 0.08). The reduction in hospitalization rates was similar in both sexes among patients with diabetes. In addition, there was a significant reduction in mortality for the vaccinated group of patients with diabetes when compared with the nonvaccinated group except for female patients aged ≥85 years. CONCLUSIONS - The study results support the use of influenza vaccine among an elderly population. However, there does not appear to be an additional benefit for patients with diabetes.