Streptococcus pneumoniae (pneumococcus) is a leading cause of pneumonia and meningitis in the United States and disproportionately affects young children and the elderly. In 2000, a 7-valent pneumococcal conjugate vaccine (PCV7) was licensed in the United States for routine use in children aged <5 years. Surveillance data from 2001 and 2002 indicated substantial declines in invasive pneumococcal disease (IPD) in children and adults compared with prevaccine years . This report updates assessment of the impact of PCV7 on IPD through 2003 by using population-based data from the Active Bacterial Core surveillance (ABCs) of the Emerging Infections Program Network, a cooperative surveillance program conducted by several state health departments and CDC. The results of this analysis indicated that 1) routine vaccination of young children with PCV7 continued to result in statistically significant declines in incidence of IPD through 2003 in the age group targeted for vaccination and among older children and adults, 2) the vaccine prevented more than twice as many IPD cases in 2003 through indirect effects on pneumococcal transmission (i.e., herd immunity) than through its direct effect of protecting vaccinated children, and 3) increases in disease caused by pneumococcal serotypes not included in the vaccine (i.e., replacement disease) occurred in certain populations but were small compared with overall declines in vaccine-serotype disease. Ongoing surveillance is needed to assess whether reductions in vaccine-serotype IPD are sustained and whether replacement disease will erode the substantial benefits of routine vaccination.