We sought to determine the proportion of rotavirus (RV) infections among children with severe diarrhea in Bangalore, India, and to determine the role of neonatal infection with the asymptomatic RV strain I321 in protection against subsequent RV diarrhea. At 2 major hospitals, there was a >42% decrease in diarrhea-specific admissions during the study period. At 6 hospitals, asymptomatic infections were found in 25%-50% of neonates, when screening was performed randomly, and in >58% of neonates, when screening was performed daily, with the majority of infections occurring within the first 7 days of life. All the RVs found in asymptomatic neonates were strain I321. A 24-month follow-up of a cohort of 44 children who had been neonatally infected with strain I321 and 28 children who had not (control group) revealed comparable rates of RV detection but a marked decrease in the number of RV diarrhea episodes in the strain I321-infected group (2.3%), compared with the control group (39.3%) (P<.0001). This preliminary study suggests a possible association between neonatal infection with strain I321 and protection against subsequent RV illness.