A stochastic epidemic model is defined in which infected individuals have different severities of disease (e.g. mildly and severely infected) and the severity of an infected individual depends on the severity of the individual he or she was infected by; typically, severe or mild infectives have an increased tendency to infect others severely or, respectively, mildly. Large-population properties of the model are derived, using branching process approximations for the initial stages of an outbreak and density-dependent population processes when a major outbreak occurs. The effects of vaccination are considered, using two distinct models for vaccine action. The consequences of launching a vaccination program are studied in terms of the effect it has on reducing the final size in the event of a major outbreak as a function of the vaccination coverage, and also by determining the critical vaccination coverage above which only small outbreaks can occur.