A limited number of empirical studies suggest that inmates suffer from high rates of serious mental illness. The literature is based largely on urban samples and does not compare rates across types of institution within a single study. This study examined a random sample of 213 jail and prison inmates in a rural State where jails and prisons are consolidated under one State corrections department with consistent policies pertaining to mentally ill inmates, thus permitting direct comparisons. Among jail inmates there was little evidence of high rates of serious mental illness, suggesting the criminalization of mental illness may not be as evident in rural settings as urban areas. However, the study did find high rates of mental disorders among prison inmates, supporting previous findings in urban and rural jurisdictions. The study indicates that rural States will be faced with increasing economic, legal, and ethical responsibility for addressing the needs and challenges of inmates with serious mental health needs. The article discusses implications of the findings in the context of a consolidated correctional system. Notes, tables, references