Enhanced surveillance for invasive pneumococcal disease (IPD) was carried out in all Australian states and territories in 2005 with comparative data available since 2001. There were 1,680 cases of IPD notified to the National Notifiable Diseases Surveillance System in Australia in 2005; a notification rate of 8.3 cases per 100,000 population. The rates varied between states and territories and by geographical region with the highest rates in the Northern Territory, the jurisdiction with the largest proportion of Indigenous people. Invasive pneumococcal disease was reported most frequently in those aged 85 years or over (41 cases per 100,000 population) and in 1-year-old children (36.5 cases per 100,000 population). Enhanced data provided additional information on 1,015 (60%) of all notified cases. The overall rate of IPD in Indigenous Australians was 8.6 times the rate in non-Indigenous Australians. There were 126 deaths attributed to IPD resulting in an overall case fatality rate of 7.5%. While the rate of IPD in the Indigenous under 2-year-old population decreased from 219 cases per 100,000 population since targeted introduction of the 7-valent conjugate pneumococcal vaccine (7vPCV) in 2001, the rate in 2005 (94 cases per 100,000 population) was significantly greater than in non-Indigenous children (20.4 cases per 100,000 population). Rates of disease in all children aged less than 2 years, caused by serotypes in the 7vPCV decreased by 75% between 2004 and 2005 as a result of the introduction of a universal childhood 7vPCV immunisation program. Significant decreases in IPD caused by 7vPCV serotypes also occurred in the 2-14 years and 65 years or over age groups. There is no evidence of replacement disease with non-vaccine serotypes. Serotypes were identified in 90% of all notified cases, with 61% of disease caused by serotypes in the 7vPCV and 88% caused by serotypes in the 23-valent polysaccharide pneumococcal vaccine (23vPPV). Reduced penicillin susceptibility remains low and reduced susceptibility to 3rd generation cephalosporins is rare.