In order to determine the impact of chickenpox on the general population, we conducted a retrospective study in four medical centres in central Israel. Hospital records of 182 patients discharged with the diagnosis of varicella during a 3-y period were reviewed. The patients' mean age was 7.9 y. A total of 14 patients (8%) were immunocompromised. Bacterial skin or soft tissue infection was the most common complication (32%). Other complications included gastrointestinal manifestations (14%), pneumonia (12%), febrile seizures (10%) and CNS complications (9%). Twenty-one percent of patients were discharged with the diagnosis of uncomplicated varicella. One patient died, one underwent liver transplantation for liver failure and four had persistent neurological sequelae. Forty-four patients (24%) received acyclovir for an average duration of 5.7 d. The mean hospital stay was 4.3 d; it was significantly longer for patients with CNS complications (8 d). We estimate that the hospitalization rate in Israel is 1/285 cases of chickenpox. While mortality from varicella was found to be relatively rare, the economic burden of this infection in Israel is quite substantial.