The need for institutional control programs to prevent HTLV-III infection depends on the frequency of drug abuse equipment sharing and male homosexual activity among inmates and on the prevalence of HTLV-III infection among inmates. Since the epidemiology of HTLV-III infection is similar to that of hepatitis B virus (HBV) infection, much that has been learned about the risk of acquiring HBV infection can be applied to understanding the risk of HTLV-III transmission in correctional facilities. Recent studies show the prevalence of HBV infection among male prisoners to range from 19-47 percent. Issues to be considered when establishing policies for HTLV-III inmate testing include counseling at the time of testing on infection prevention and test confidentiality. Adequate referral, social, and psychological support services are necessary for persons diagnosed as having AIDS or HTLV-III infection. Policies regarding the management of Wisconsin inmates infected with HTLV-III must consider existing State statutes regarding the confidentiality of test results. Specific recommendations for identifying and evaluating HTLV-III infection, confidentiality, and infection control are offered. Appendixes provide supplemental data on case definition and Wisconsin law. 30 references.