A hospital-acquired outbreak of influenza-like illness that involved 29 patients during 4 weeks was detected in March 1980. The average age of the patients was 63 years. Eighteen of the 29 patients with symptoms had influenza B virus infection documented by virus isolations, fourfold or greater hemagglutination inhibition antibody increases, or both. The attack rate among all hospitalized inpatients was 20%. Absenteeism of the hospital staff because of influenza-like illnesses preceded the outbreak by several weeks, suggesting staff-to-patient transmission. The patients' sera during acute illness had low hemagglutination inhibition antibody titers (geometric mean titer of 1:21) against contemporary influenza B virus antigens, indicating that the patients were highly susceptible to influenza B virus. Only one patient had received trivalent influenza vaccine during the preceding year. The excess hospital cost resulting from the outbreak was +13 270 or +458 per patient. Our observations show that the elderly are at risk of developing nosocomial influenza B virus infection and that these illnesses are costly. Continued efforts to develop efficient influenza immunization programs for elderly persons and hospital staff are worthwhile.