Researchers have recently combined individual-level data with institutional measures to detect prison-level correlates of inmate misconduct. Although this body of literature has yielded insights into how the prison environment contributes to misconduct, the authors argue that it has ignored an important level of analysis, namely the custody level. As some inmates are placed in more restrictive confinement than others, custody levels may absorb some of the variation in individual-level and/or prison-level correlates of misconduct. Accordingly, the authors analyzed data from over 70,000 inmates who were housed in Texas prisons during 2008 and found that custody levels were strongly and positively associated with misconduct, even (a) after accounting for the endogeneity of custody levels and (b) once inmate- and prison-level measures were included. The authors draw on labeling theory in their efforts to explain the relationship between custody levels and misconduct. (Published Abstract)