To collect information on potential incentives and problems, questionnaires were sent to corrections directors in the 50 States, the District of Columbia, and the Federal Bureau of Prisons as well as to 53 criminal justice experts and 51 administrators of the Interstate Corrections Compact. Reports of shared operations and sample legislation and cooperative agreements were reviewed to determine how joint-ventures have been authorized and administered. Representatives of private industry were consulted as was the only current example of an interstate correctional operation. The concept of Federal/State cooperation was determined to be feasible on the basis of the identified perceived needs and incentives to participate, commonality of problems in Federal and State prison systems, and estimates of cost savings that may be obtained by joint rather than individual actions. Experiences with correctional and noncorrectional joint ventures and the expressed needs of Federal and State governments suggest four administrative options or models for cooperation: the special-purpose contract facility, joint siting, the compact or joint powers model, and the public corporation. The report presents guidelines for implementation and notes potential roles for the private sector in financing, constructing, and/or operating prisons.