The tremendous growth in state and federal correctional populations has focused greater attention on the needs of mentally ill and substance abusing inmates. Although an estimated 3–11% of prison inmates have co-occurring mental health (psychotic and major mood) disorders and substance abuse disorders, few treatment programs are described in the literature and there is little available information regarding effective treatment strategies for this population. The current study provides an integrative review of seven ‘dual diagnosis’ treatment programs that recently have been developed in state and federal prisons. Many of these have evolved from existing substance abuse treatment programs and approaches. Key program components include an extended assessment period, orientation/motivational activities, psychoeducational groups, cognitive–behavioral interventions such as restructuring of ‘criminal thinking errors’, self-help groups, medication monitoring, relapse prevention, and transition into institution or community-based aftercare facilities. Many programs use therapeutic community approaches that are modified to provide (a) greater individual counseling and support, (b) less confrontation, (c) smaller staff caseloads, and (d) cross-training of staff. Research is underway in three of the seven sites to examine the effectiveness of these new programs.