Objectives: To examine the impact of Australia's single dose infant varicella vaccination program, we assessed single dose varicella vaccine effectiveness (VE) in preventing hospitalised disease using two methods. Methods: Clinically confirmed varicella cases from the Paediatric Active Enhanced Disease Surveillance (PAEDS) sentinel network were age-matched to 20 controls obtained from the Australian Immunisation Register. Conditional logistic regression models were used to estimate VE and compared with estimates obtained using our second approach. Results: There were 78 hospitalised varicella cases during the post vaccine introduction period from January 2008 to December 2015, who were eligible for funded varicella vaccination. Median age at onset was 4.5 years and more than half (59%) were vaccinated. The majority of children received one vaccine brand (Varilrix, GSK). The estimated case-control VE for one dose of vaccine against hospitalised varicella was 64.7% (95% CI: 43.3–78.0%); estimates using the screening method were not significantly different. Exclusion of children who were immunocompromised did not significantly alter VE estimates. Conclusions: Although Australia's program has impacted on the burden of varicella disease, single dose VE against varicella hospitalisation is only moderate. Greater reductions in varicella disease could potentially be achieved by incorporation of a second vaccine dose into the program to minimise breakthrough disease and interrupt virus circulation.