IMPORTANCE Pneumonia is the world’s leading cause of death in children and the leading infectious cause of death among U.S. adults 65 years old and older. Pneumococcal conjugate vaccination of infants has previously been shown to reduce invasive pneumococcal disease (IPD) among seniors through prevention of pneumococcal transmission from infants to adults (herd immunity). Our analysis documents a significant vaccine-associated reduction not only in IPD but also in pneumococcal pneumonia hospitalizations and inpatient mortality rates among both vaccinated children and unvaccinated adults. We estimate that fully 90% of the reduction in the pneumonia hospitalization burden occurred among adults. Moreover, states that more rapidly introduced their infant pneumococcal immunization programs had greater reductions in influenza-associated pneumonia hospitalization of children, presumably because the vaccine acts to prevent the pneumococcal pneumonia that frequently follows influenza virus infection. Our results indicate that seven-valent pneumococcal conjugate vaccine use has yielded far greater benefits through herd immunity than have previously been recognized.