We determined the efficacy of postexposure prophylaxis (PEP) and treatment of ill index cases with oseltamivir, in an attempt to prevent influenza transmission in households, in a study conducted in 277 households with 298 index cases (62% with laboratory-confirmed influenza) and 812 contacts aged > or =1 year. Contacts were randomized by household to receive treatment (5 days; n=402), if illness developed, or PEP for 10 days (n=410), and the number of households with at least 1 contact developing laboratory-confirmed influenza was measured. PEP provided a protective efficacy of 58.5% (95% confidence interval [CI], 15.6%-79.6%; P=.0114) for households against proven influenza and 68.0% (95% CI, 34.9%-84.2%; P=.0017) for individual contacts, compared with treatment of index cases alone. No oseltamivir-resistant variants were detected in treated index cases or contacts. PEP of household contacts of those with influenza reduces the secondary spread of influenza in families when the initial household case is treated.