Although Slovenia has one of the lowest incarceration rates in the world, there are not enough facilities to house the current inmate population, and prison overcrowding is becoming a serious problem in the country. This article addresses this issue, beginning with an in-depth history of penology and penal practices in Slovenia and concluding with suggestions to deal with this potentially disastrous situation. If the imprisonment rate in Slovenia does not decrease in the near future, or if Slovenia cannot create more capacity, prison overcrowding will grow beyond acceptable standards. The present situation in Slovene prisons calls for a multidisciplinary research and cost/benefit analysis. The Slovenian prison administration is challenged by its budget and staff resources. However, it is argued that the problem goes beyond this capacity and requires a serious reconsideration of penal policy, criminal court practice, and parole committee practices as well. It is also necessary to emphasize that Slovenia is the only country in the European Union without a probation service system. (Published Abstract)