The automated records of over 250,000 members of a health maintenance organization were analyzed to assess the epidemiology of varicella and its complications between 1 July 1990 and 30 June 1992. All complications were verified by review of full-text medical records. The incidence rates of varicella in persons < 15 years of age were 20%–50% lower than published figures, probably reflecting underreporting. The rates in those ⩾15 years old, however, were greater than those reported for 1972–1978 (607 vs. 291/105 years, 15–19 years old; 175 vs. 33/105 years, ⩾20 years old). The rates of hospitalization for uncomplicated varicella, skin superinfections, and pneumonia in children were, respectively, 15, 11, and 4 times higher than previous estimates. Hospitalization rates for adults with pneumonia and uncomplicated varicella were >5 times higher than prior figures. Thus, varicella in adults and varicella complications in general may be more frequent than previously estimated.