Rotavirus is the most common cause of fatal childhood diarrhea worldwide. We provide the first estimates of the health care and economic burden of severe rotavirus disease in Oman. We conducted active, hospital-based surveillance of rotavirus disease at 11 regional public hospitals in Oman, using the guidelines suggested by the generic World Health Organization protocol. From July 2006 through June 2008, all children aged <5 years who were hospitalized for acute gastroenteritis were enrolled in the surveillance program, and their stool samples were tested for rotavirus using a commercially available enzyme immunoassay (ID EIA Rotavirus Test; Dako Diagnostics). Rotavirus was detected in samples from 1712 (49%) of 3470 children. These children were hospitalized for a median of 3 days for severe diarrhea. A marked seasonal peak was evident with a majority of the cases occurring from December through May. Of the rotavirus cases, 69% occurred in children aged 6-17 months. We identified a diverse strain pattern in Oman, with G2 (37%), G1 (38%), and G9 (11%) accounting for most of typeable strains. By our burden estimates, the Omani government spends an estimated US$791,817 and US$1.8 million annually to treat rotavirus-associated diarrhea in the outpatient and hospital settings, respectively. A rotavirus vaccination program might substantially reduce the burden of severe diarrhea among children in Oman.