This study was undertaken during 1987-1988 to compare State government correctional facilities in two States (Massachusetts and Kentucky) are managed and operated by private contractors to similar facilities that are managed and operated by public employees. Data collection procedures included surveys of inmates and staff, interviews with officials involved in the operation of facilities, and physical inspections of each facility. It was concluded that use of privately-owned correctional facilities for minimum security adult males and for difficult youth offenders is an appropriate option for State governments. It is an important option, particularly if additional capacity is needed by the State. While these findings do not indicate that private operation should be substituted for existing public facilities, they do indicate that the use of the private sector, in appropriate situations, can be good for both inmates and the public. 58 tables and appendix.