Objective: To review cases of nosocomial influenza and compare the epidemiology, clinical characteristics and outcomes with community-acquired cases. Design, setting and participants: Prospective case series of adults hospitalised with influenza during April – November of 2010 and 2011 using a hospital-based sentinel surveillance system. A nosocomial case was defined as polymerase chain reaction-confirmed influenza where symptom onset was more than 2 days after admission or, if this was not known, where the date of the positive test was more than 7 days after admission. Main outcome measures: Demographic, clinical and outcome measures for patients with nosocomial influenza compared with patients admitted with community-acquired influenza. Results: In 2010–2011, 598 cases of influenza were detected, of which 26 (4.3%) were nosocomial. All patients with nosocomial influenza had chronic comorbidities, compared with 71.7% of patients (410/572) with community-acquired influenza (P = 0.001). Similar proportions of community-acquired (32.5%) and nosocomial (36.4%) cases occurred in patients vaccinated in the current season. Clinical findings at time of enrolment did not differ between the two groups, with similar rates of fever, cough, chest pain and dyspnoea. Compared with community-acquired cases, a higher proportion of patients with nosocomial influenza received neuraminidase inhibitors within 2 days of symptom onset (38.5% v 15.9%; P = 0.003). Admission to intensive care took place in 21.3% and 23.1% of community-acquired and nosocomial cases, respectively. One death from nosocomial influenza occurred in a patient with end-stage respiratory disease. Conclusions: Nosocomial influenza is uncommon but may be associated with severe disease. It may be partially preventable as patients frequently have comorbidities for which influenza vaccination is recommended. Patients, particularly those at high risk of complications, and their contacts (including health care workers) should be vaccinated to prevent severe disease.