There were 2,174 cases of invasive pneumococcal disease (IPD) notified to the National Notifiable Diseases Surveillance System (NNDSS) in Australia in 2003; a rate of 10.9 per 100,000 population. The notification rate varied between states and territories and by geographical region with the highest rates in the north of the country. Invasive pneumococcal disease was reported most frequently in children aged less than two years (98.8 cases per 100,000 population). Enhanced surveillance for IPD in 2003 was carried out in all states and territories, providing additional data on 1,842 (85%) of all notified cases. Rates of IPD in Indigenous Australians were three times the rate in non-Indigenous Australians. There were 125 deaths attributed to IPD resulting in an overall case fatality rate of 6.8 per cent. Seventy-one percent of all pneumococcal isolates serotyped were serotypes in the seven-valent conjugate vaccine and 91 per cent were serotypes in the 23-valent polysaccharide pneumococcal vaccine. The clinical presentation and risk factors for IPD varied between Indigenous and non-Indigenous cases and non-vaccine serotypes occurred more frequently among Indigenous children and adults. Data from three years of surveillance indicate an early impact of the 7-valent vaccine in the target population.