Background. Influenza is a common, vaccine preventable, viral respiratory infection with potentially serious consequences in persons aged 60 years and above. In China, influenza vaccination is recommended but not reimbursed for people. Therefore, we studied management of influenza episode, healthcare resource use and costs associated with influenza infection in people aged over 60 in Shanghai. Methods. A prospective, observational study was conducted over the 2008-2009 influenza season. Persons aged 60 years and above presenting to a study center with acute onset of influenza-like illness (ILI) were enrolled and tested by PCR for influenza virus. Laboratory confirmed influenza (LCI) patients were visited 2 weeks later for detail information. Results. From January 2009 to December 2009, 1,946 subjects were recruited. Among them 1,777 patients met the inclusion criteria, 395 (22.2%) tested positive. 341 (86%) patients received ambulatory care only while 54 (14%) were hospitalized. Most patients had been prescribed at least one medication (94%), and had had at least one laboratory test (92%). An outpatient cost a mean of USD 47 per case. Once hospitalized, the average length of stay was 17.0 days (SD = 13.82) and the mean total inpatient cost reached USD 1,601. The public health insurance paid 69% and 79% of the mean outpatient and inpatient costs per patient respectively. Conclusion. This study described the management of a LCI case in people aged more than 60 years in Shanghai and estimated the economic burden in particular from the public healthcare system perspective, showing expensive consequences among hospitalized patients.