Streptococcus pneumoniae is the leading bacterial cause of community-acquired pneumonia hospitalizations and an important cause of bacteremia and meningitis, especially among young children and older adults. A 7-valent pneumococcal conjugate vaccine (PCV7) was licensed and the Advisory Committee on Immunization Practices formulated recommendations for its use in infants and children in February 2000. Vaccination coverage rapidly increased during the second half of 2000, in part through funding by CDC's Vaccines for Children program. Subsequently, active population- and laboratory-based surveillance demonstrated substantial reductions in invasive pneumococcal disease (IPD) among children and adults. In addition, decreases in hospitalizations and ambulatory-care visits for all-cause pneumonia also were reported. To gauge whether the effects of PCV7 on reducing pneumonia continue, CDC is monitoring pneumonia hospitalizations by using data from the Nationwide Inpatient Sample. This report provides an update for 2005 and 2006, the most recent years for which information is available. In 2005 and 2006, the incidence rates for all-cause pneumonia hospitalizations among children aged <2 years were 9.1 per 1,000 and 8.1 per 1,000, respectively. In 2006, the rate for all-cause pneumonia among children aged <2 years was approximately 35% lower than during 1997--1999. Most of this decrease occurred soon after the vaccine was licensed in 2000, and the rates have remained relatively stable since then. The rate for all-cause pneumonia among children aged 2--4 years did not change after PCV7 licensure and has remained stable. Continued monitoring of pneumonia-related hospitalizations among children is needed to track the effects of pneumococcal immunization programs.