Postlicensure surveillance of pneumonia incidence can be used to estimate whether pneumococcal conjugate vaccines (PCVs) affect incidence. We used Poisson regression models that control for baseline seasonality to determine the impact of PCVs and the possible effects of variations in virus activity in Israel on these surveillance estimates. PCV was associated with significant declines in radiologically confirmed alveolar pneumonia (RCAP) among patients <6 months, 6-17 months, and 18-35 months of age (-31% [95% CI -51% to -15%], -41% [95% CI -52 to -32%], and -34% [95% CI -42% to -25%], respectively). Respiratory syncytial virus (RSV) activity was associated with strong increases in RCAP incidence, with up to 44% of cases attributable to RSV among infants <6 months of age and lower but significant impacts in older children. Seasonal variations, particularly in RSV activity, masked the impact of 7-valent PCVs, especially for young children in the first 2 years after vaccine introduction.