OBJECTIVE. Live attenuated influenza vaccine may protect against wild-type influenza illness shortly after vaccine administration by innate immunity. The 2003-2004 influenza A (H3N2) outbreak arrived early, and the circulating strain was antigenically distinct from the vaccine strain. The objective of this study was to determine the effectiveness of influenza vaccines for healthy school-aged children when administered during the influenza outbreak. DESIGN/METHODS. An open-labeled, nonrandomized, community-based influenza vaccine trial was conducted in children 5 to 18 years old. Age-eligible healthy children received trivalent live attenuated influenza vaccine. Trivalent inactivated influenza vaccine was given to children with underlying health conditions. Influenza-positive illness was compared between vaccinated and nonvaccinated children. Medically attended acute respiratory illness and pneumonia and influenza rates for Scott and White Health Plan vaccinees were compared with age-eligible Scott and White Health Plan nonparticipants in the intervention communities. Herd protection was assessed by comparing age-specific medically attended acute respiratory illness rates in Scott and White Health Plan members in the intervention and comparison communities. RESULTS. We administered 1 dose of trivalent live attenuated influenza vaccine or trivalent inactivated influenza vaccine to 6569 and 1040 children, respectively (31.5% vaccination coverage), from October 10 to December 30, 2003. The influenza outbreak occurred from October 12 to December 20, 2003. Significant protection against influenza-positive illness (37.3%) and pneumonia and influenza events (50%) was detected in children who received trivalent live attenuated influenza vaccine but not trivalent inactivated influenza vaccine. Trivalent live attenuated influenza vaccine recipients had similar protection against influenza-positive illness within 14 days compared with >14 days (10 of 25 vs 9 of 30) after vaccination. Indirect effectiveness against medically attended acute respiratory illness was detected in children 5 to 11 and adults 35 to 44 years of age. CONCLUSION. One dose of trivalent live attenuated influenza vaccine was efficacious in children even when administered during an influenza outbreak and when the dominant circulating influenza virus was antigenically distinct from the vaccine strain. We hypothesize that trivalent live attenuated influenza vaccine provides protection against influenza by both innate and adaptive immune mechanisms.