In August 2012, an explosive outbreak of severe lower respiratory tract infection (LRTI) due to Streptococcus pneumoniae serotype-8 occurred in a highly vaccinated elderly institutionalized population in England. Fifteen of 23 residents developed LRTI over 4 days (attack rate 65%); 11 had confirmed S. pneumoniae serotype-8 disease, and two died. Following amoxicillin chemoprophylaxis and pneumococcal polysaccharide vaccine (PPV) re-vaccination no further cases occurred in the following 2 months. No association was found between being an outbreak-associated case and age (P = 0·36), underlying comorbidities [relative risk (RR) 0·84 95% confidence interval (CI) 0·34–2·09], or prior receipt of PPV (RR 1·4, 95% CI 0·60–3·33). However, the median number of years since PPV was significantly higher for cases (n = 15, 10·2 years, range 7·3–17·9 years) than non-cases (n = 8, 7·2 years, range 6·8–12·8 years) (P = 0·045), provided evidence of waning immunity. Alternative vaccination strategies should be considered to prevent future S. pneumoniae outbreaks in institutionalized elderly populations.