The report traces the growth of New Jersey's inmate population and attendant costs of incarceration. Factors influencing inmate population growth and the consequences of prison overcrowding are identified, followed by a projection of the New Jersey inmate population through 1988. The report identifies three stages where prison overcrowding and incarceration costs can be reduced: admission, custody management, and release. Analyses of the admission stage and custody management focus on how to divert offenders from incarceration (pretrial intervention, probation, intensive supervision, and community work programs) and how to cut costs. The release phase analysis focuses on how State sentencing laws have increased the time served by inmates, as well as the impact of New Jersey parole legislation. Recommendations for each of the areas of admission, custody, and release are categorized by short-term and long-term strategies. The appendix provides additional detail for the short-term cost reduction recommendations.