The epidemiology, significance, and clinical consequences of influenza in the hospital setting were studied in a prospective surveillance of adults in an acute-care hospital during the 1986-1987 influenza season, specifically searching for cases of nosocomial influenza. A total of 43 cases of influenza A were identified; 17 cases occurred among working hospital employees, 14 cases occurred among patients in the emergency room or clinics, ten were community-acquired cases among hospitalized patients, and two cases were nosocomially acquired. The nosocomial influenza attack rate was 0.3 per 100 hospital admissions. Both cases of nosocomial influenza were associated with secondary pneumonias and prolongation of hospital stay. These cases might have gone unrecognized in the absence of an influenza surveillance program. A potential reservoir of infection was the health care providers caring for the hospitalized patients. Further systematic influenza surveillance is needed to assess the global medical and economic impact of nosocomial influenza on hospitals, rather than simply relying on reports of institutional outbreaks.