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Despite increased use of vaccine in routine immunisation, rotavirus remains a major cause of acute gastroenteritis (AGE) in low-income countries. We describe rotavirus prevalence and hospitalisation in Malawi pre and four years post vaccine introduction; provide updated vaccine effectiveness (VE) estimates; and assess rotavirus vaccine indirect effects. Children under five years of age presenting to a referral hospital in Blantyre with AGE were recruited. Stool samples were tested for rotavirus using Enzyme Immunoassay. The change in rotavirus prevalence was evaluated using Poisson regression. Time series analysis was used to further investigate trends in prevalence over time. VE against rotavirus diarrhoea of any severity was estimated using logistic regression. Indirect effects were estimated by evaluating rotavirus prevalence in unvaccinated children over time, and by comparing observed reductions in incidence of rotavirus hospitalisation to those expected based on vaccine coverage and trial efficacy estimates. 2320 children were included. Prevalence of rotavirus in hospitalised infants (<12 months) with AGE decreased from 69/139(49.64%) prior to vaccine introduction to 197/607(32.45%) post-vaccine introduction (adjusted RR 0.67[95% CI 0.55, 0.82]). Prevalence in children aged 12–23 months demonstrated a less substantial decline: 15/37(40.54%) pre- and 122/352(34.66%) post-vaccine introduction (adjusted RR 0.85, 95% CI 0.57, 1.28). Adjusted VE was 61.89%(95% CI 28.04–79.82), but lower in children aged 12–23 months (31.69% [95% CI −139.03 to 80.48]). In hospitalised infants with rotavirus disease, the observed overall effect of the vaccine was 9% greater than expected according to vaccine coverage and efficacy estimates. Rotavirus prevalence among unvaccinated infants declined post-vaccine introduction (RR 0.70[95% CI 0.55–0.80]). Following rotavirus vaccine introduction in Malawi, prevalence of rotavirus in hospitalised children with AGE has declined significantly, with some evidence of an indirect effect in infants. Despite this, rotavirus remains an important cause of severe diarrhoea in Malawian children, particularly in the second year of life.