Current contracting requirements and procedures in California's adult and juvenile correctional systems are outlined, and contracted prison construction, medical, counseling, and specialized services in the State are discussed. Experiences in Tennessee and Pennsylvania with privatized prison operations are described, particularly the program at Butler County Prison (Pennsylvania) run by Buckingham Security, Ltd. The potential contributions of electronic surveillance to easing prison overcrowding without compromising public safety also are delineated. Advantages and limitations of prison privatization are discussed in terms of overcrowding, correctional standards, cost effectiveness, accountability, State responsibilities, liability, staff training, quality of inmate services, monitoring of contracted services, and effects on public-sector labor relations. An evaluation of the Butler County operation is appended.