During annual influenza epidemics, outbreaks of influenza in closed institutions are common. Among healthy children or young adults, such outbreaks are uncommonly associated with serious morbidity or mortality; however, in hospitals and nursing homes, attack rates as high as 60% and case-fatality rates as high as 50% have been reported. Annual influenza vaccination of both patients or residents and hospital and nursing home staff has had a substantial impact on mortality and has reduced the number of outbreaks. Nonpharmacologic interventions (e.g., handwashing and contact isolation of case patients) may reduce the spread of influenza, although evidence for their efficacy is lacking. Nonetheless, long-term care facilities for the elderly population with high vaccination rates and better-than-average infection-control programs have a 25%-50% chance of experiencing an influenza outbreak each year, with an expected resident attack rate of 35%-40%. Thus, antiviral drugs have been increasingly used to mitigate the impact of influenza outbreaks. There are 2 classes of antiviral drugs that are active against influenza: adamantanes and neuraminidase inhibitors. Drugs of the 2 classes appear to be equally effective for the treatment and prophylaxis of susceptible influenza A virus strains. However, adamantanes are not active against influenza B virus, and an increasing proportion of influenza A isolates are resistant to adamantanes. Adamantanes are associated with higher rates of adverse events than are neuraminidase inhibitors. There is substantial evidence that antiviral prophylaxis is effective in terminating outbreaks of seasonal influenza in closed institutions. If stockpiles are adequate, antiviral drugs are likely to be even more important in mitigating the impact of influenza transmission in health care institutions during the next influenza pandemic.