The author compares the measures of rated versus operating capacity, concluding that the latter is most significant. The pressure on occupancy rates in Australia has increased markedly in the last 7 years to the point where the 1986 rate was 118.8 percent. The paper estimates that the drift upward will continue for many years. A discussion of factors affecting this increase concludes that the prison overcrowding debate does not really impinge on the crime control debate. Four effects of overcrowding are examined: burgeoning costs of corrections; short-term administrative or political responses; adverse reactions to these responses by media, the public, and other criminal justice agencies; and further administrative and political responses calculated to exacerbate rather than alleviate the problem. Front-end mechanisms to reduce overcrowding are discussed, particularly shorter sentences and community-based dispositions. A comparison of two mainland States, Victoria and South Australia, illustrates the positive impact of a community-based appraoch on overcrowding. Threats to reform from the judiciary and politicians are explored. 3 tables, 2 figures, and approximately 50 references.