This article serves as a resource for developing such policies, including general background information on AIDS transmission, diagnosis, and testing and defining key terms. It also identifies a number of sample procedures for the evaluation and management of inmates with AIDS, suspected AIDS, or ARC, namely, identification and evaluation, housing, infection control, transportation, visiting, work assignments, food service, laundry control, and reporting procedures. Clinical guidelines developed by the Center for Disease Control are provided in addition to general guidelines to assist medical, dental, and laboratory staff in the provision of care and treatment to AIDS and ARC patients. A discussion of legal aspects of AIDS addresses such issues as informed consent, confidentiality, and voluntary/involuntary testing and treatment. Training and education needs of both inmates and staff are identified. 6 appendixes.