For over 50 years, it has been the policy of the Federal Bureau of Prisons to provide services to inmates with mental disorders. At present psychiatric hospitals operated by Federal civil service and public health professionals are treating 600 inmates. The types of services available to mentally-ill inmates are described, along with a discussion of the problems and benefits of treating patients in a prison setting. Some kinds of mental illness such as schizophrenia can be treated effectively in a prison, while those suffering from paranoia or antisocial personality disorders often perceive that the prison setting exacerbates their disorders. Innovations in prison treatment are discussed.