The last 10 years have seen a renewed interest in the productive capacity of prisons and the potential value of private sector involvement in developing that potential. By 1982, upwards of 20 States had legislation authorizing some form of private sector involvement within prison industries. On the Federal level, the Prison Industries Enhancement Act of 1979 selectively repealed Federal laws restricting the movement of prison-made goods. It was passed by Congress without active opposition from organized labor, which was apparently satisfied by the limitation to only seven pilot projects. In 1981, Senator Dole introduced Senate Bill 1597 which would remove the limit on the number of such projects but would require all such projects to meet the minimum standards defined in the 1979 legislation. This bill is still being considered. Minnesota's legislation to establish private industry on the grounds of correctional institutions was the first of its kind when it passed in 1973. It has served as a model for many other States. States which have now authorized some form of private sector involvement with State prison industries include Alaska, Maine, Ohio, Oklahoma, and 16 others. For the first time, the open market for prison-made goods is developing in tandem with a growth in protective measures for prison workers. The new statutes prohibit the kind of low wages and involuntary servitude which typified earlier experiments with prison labor. The future of the public/private partnerships made possible by these statutes may depend upon the creation of financial incentives to encourage more private sector businesses to explore the possibilities available through prison industries. Eighteen footnotes are provided.