The incidence of rotavirus-associated severe diarrhoea and distribution of rotavirus genotypes in children less than five years of age was determined in two low-income communities in Karachi, Pakistan. Over a two-year period, 717 children met eligibility criteria for severe diarrhoea and stools were obtained from 575 (80%) with 97 (17%) being rotavirus positive. Adjusted annual rates of severe rotavirus diarrhoea in children less than five years and less than one year were respectively 5.7 and 16.9 per 1000 in community A, and 8.1 and 25.4 per 1000 child years of observation in community B. An estimated 1 in 40 infants experience a severe episode of rotavirus gastroenteritis annually in Pakistan. The most common rotavirus strains were G9P (15%), G1P (13%) and G1[P4] (8.4%). This information will inform policy decisions about the introduction of rotavirus vaccines.