Rotavirus vaccination has substantially reduced the incidence of rotavirus-associated gastroenteritis (RVGE) in high-income countries, but vaccine impact and estimated effectiveness are lower in low-income countries for reasons that are poorly understood. We used mathematical modeling to quantify rotavirus vaccine impact and investigate reduced vaccine effectiveness, particularly during the second year of life, in Malawi, where vaccination was introduced in October 2012 with doses at 6 and 10 weeks. We fitted models to 12 years of prevaccination data and validated the models against postvaccination data to evaluate the magnitude and duration of vaccine protection. The observed rollout of vaccination in Malawi was predicted to lead to a 26 to 77% decrease in the overall incidence of moderate-to-severe RVGE in 2016, depending on assumptions about waning of vaccine-induced immunity and heterogeneity in vaccine response. Vaccine effectiveness estimates were predicted to be higher among 4- to 11-month-olds than 12- to 23-month-olds, even when vaccine-induced immunity did not wane, due to differences in the rate at which vaccinated and unvaccinated individuals acquire immunity from natural infection. We found that vaccine effectiveness during the first and second years of life could potentially be improved by increasing the proportion of infants who respond to vaccination or by lowering the rotavirus transmission rate. An additional dose of rotavirus vaccine at 9 months of age was predicted to lead to higher estimated vaccine effectiveness but to only modest (5 to 16%) reductions in RVGE incidence over the first 3 years after introduction, regardless of assumptions about waning of vaccine-induced immunity.