Background. Uncertainties regarding influenza disease impact and benefits of vaccination may contribute to low vaccination rates among adults aged 50-64 years. Methods. This prospective cohort study assessed the burden of influenza-like illness (ILI) among working adults aged 50-64 years and the effectiveness of influenza vaccination in reducing the rate of ILI and productivity losses. Employees of the University of Minnesota (Minneapolis) were invited via e-mail to participate in the study during October 2006. The study data were collected using internet-based surveys at baseline (October 2006) and during the follow-up period (from November 2006 through April 2007). Months included in the 2006-2007 influenza season were identified retrospectively from Minnesota Department of Health surveillance data. Vaccine effectiveness for reducing the rate of ILI, ILI-associated health care use, the number of days of illness, work loss, and reduced on-the-job productivity during the influenza season were assessed using multivariable regression models after controlling for important confounders. Results. Four hundred ninety-seven persons were included in the study, 85 (17.1%) of whom experienced an ILI. Among unvaccinated participants, ILI was responsible for 45% of all days of illness during the influenza season, 39% of all illness-related work days lost, and 49% of all days with illness-related reduced on-the-job productivity. In the multivariable regression analyses, vaccination was associated with a significant reduction in the rate of ILI (adjusted odds ratio, 0.48; 95% confidence interval, 0.27-0.86) and fewer days of illness, absenteeism, and impaired on-the-job performance. Conclusion. ILIs were common among our study participants, accounting for a large portion of illness, work loss, and impaired work performance during the influenza season. Vaccination was associated with substantial health and productivity benefits. Vaccine delivery should be improved for this high-priority group.