Background: The seven-valent pneumococcal conjugate vaccine (PCV7) has reduced vaccine-type (VT) invasive pneumococcal disease but increases in non-vaccine-type (NVT) disease have varied between countries. We assess the effect of the PCV7 vaccination on VT and NVT disease in England and Wales. Methods: The study cohort was the population of England and Wales from July, 2000, to June, 2010. We calculated incidence rate ratios (IRRs) to compare incidences of VT and NVT disease before (2000-06) and after (2009-10) the introduction of PCV7. We used data from the national surveillance database. Cases included in our analysis were restricted to those confirmed by culture linked with isolates referred for serotyping at the national reference centre by laboratories in England and Wales. We adjusted for potential bias from missing data (serotype and age of patient) and changes in case ascertainment rates during the study period. Findings: 5809 cases of invasive pneumococcal disease were reported in 2009-10, giving an incidence of 10·6 per 100 000 population in 2009-10, which, when compared with the adjusted average annual incidence of 16·1 in 2000-06, gives an overall reduction of 34% (95% CI 28-39). VT disease decreased in all age groups, with reductions of 98% in individuals younger than 2 years and 81% in those aged 65 years or older. NVT disease increased by 68% in individuals younger than 2 years and 48% in those aged 65 years or older, giving an overall reduction in invasive pneumococcal disease of 56% in those younger than 2 years and 19% in those aged 65 years or older. After vaccine introduction, more NVT serotypes increased in frequency than decreased, which is consistent with vaccine-induced replacement. Key serotypes showing replacement were 7F, 19A, and 22F. Increases in NVT invasive pneumococcal disease were not associated with antimicrobial resistance. Interpretation: Despite much serotype replacement, a substantial reduction in invasive pneumococcal disease in young children can be achieved with PCV7 vaccination, with some indirect benefit in older age groups. Further reductions should be achievable by use of higher valency vaccines. Robust surveillance data are needed to properly assess the epidemiological effect of multivalent pneumococcal disease vaccines. Funding: Health Protection Agency.