For many years hepatitis A was one of the most common vaccine preventable diseases in Israel. In 1999, Israel became the first country to introduce an inactivated hepatitis A vaccine into its national childhood vaccination program. The objectives of the present study were to study trends in disease incidence after the implementation of the new vaccination policy and to assess vaccination coverage among children and adults in Israel. We used the databases of the second largest HMO in Israel (1.7 million members) to identify patients who had evidence of hepatitis A in 1998 and 2007 and to collect information on all subjects who received at least one dose of hepatitis A vaccine during the study period. Hepatitis A vaccination coverage in children <5 years and 5-14 years of age increased from 9% and 15% in 1998 to 89% and 68% in 2007, respectively. During this period the annual incidence of hepatitis A dropped from 142.4 per to 7.6 per 100 000. The most prominent reduction in the age-specific annual incidence rates was calculated in children <5 years from 239.4 per 100 000 in 1998 to 2.2 per 100 000 in 2007 and from 310.3 per 100 000 to 3.0 per 100 000 in children aged 5-14 years. In endemic areas, vaccination of infants and children against hepatitis A can greatly reduce the total burden of the disease.