Two effective vaccines for rotavirus infection will be available near future in Japan and data on the burden of rotavirus disease and the circulating rotavirus strains are urgently needed. To obtain these data, we set up active rotavirus hospitalization surveillance in three cities, Tsu, Matsusaka, and Ise in Mie Prefecture, Japan. From November 1, 2007 through October 31, 2009, we enrolled children <5 years of age who were hospitalized with a diagnosis of acute gastroenteritis (AGE) and collected information on age, sex, month of admission, city of residence, and symptoms at the time of hospitalization. Stool samples were also obtained for rotavirus testing and genotype investigation. Rotavirus infection accounted for approximately 40% to 50% of hospitalized AGE cases in each city, and approximately 63% of those hospitalized were 2 years of age or younger. Matsusaka had the highest incidence rate at 4.7 rotavirus hospitalizations per 1,000 children <5 years of age (95% confidence interval [CI]: 3.6-5.9), followed by Tsu City (4.4 per 1,000; 95% CI: 3.6-5.3), and Ise City (2.8 per 1,000; 95% CI: 2.0-4.0). The most dominant rotavirus genotype was G3P[8], which accounted for 73.1% of cases. Our findings confirm the substantial health burden of rotavirus AGE hospitalization among Japanese children <5 years of age.