Systematic reviews and meta-analyses confirm that influenza vaccination reduces the risk of influenza illness by between about 40% and 60% in seasons when circulating influenza stains are well matched to vaccine strains. Influenza vaccine effectiveness (IVE) estimates, however, are often discordant and a source of confusion for decision makers. IVE assessments are increasingly publicized and are often used by policy makers to make decisions about the value of seasonal influenza vaccination. But there is limited guidance on how IVE should be interpreted or used to inform policy. There are several limitations to the use of IVE for decision-making: (a) IVE studies have methodological issues that often complicate the interpretation of their value; and (b) the full impact of vaccination will almost always be greater than the impact assessed by a point estimate of IVE in specific populations or settings. Understanding the strengths and weaknesses of study methodologies and the fundamental limitations of IVE estimates is important for the accuracy of interpretations and support of policy makers’ decisions. Here, we review a comprehensive set of issues that need to be considered when interpreting IVE and determining the full benefits of influenza vaccination. We propose that published IVE values should be assessed using an evaluative framework that includes influenza-specific outcomes, types of VE study design, and confounders, among other factors. Better interpretation of IVE will improve the broader assessment of the value of influenza vaccination and ultimately optimize the public health benefits in seasonal influenza vaccination. © 2020 The Authors. Influenza and Other Respiratory Viruses Published by John Wiley & Sons Ltd.