A limited number of recent empirical studies suggest that inmates suffer from high rates of serious mental illness. Different explanations are offered depending on the type of institution: jail or prison. The literature is based largely on urban samples and does not offer comparisons of rates across types of institution within a single study. The present study examined a random sample of 213 jail and prison inmates in a rural state using the Diagnostic Interview Schedule (III-R). Among jail inmates there was little evidence of high rates of serious mental illness, suggesting the criminalization of mental illness may not be as evident in rural settings as urban areas. Among prison inmates, however, high rates of mental disorders were found, supporting previous findings in urban and rural jurisdictions. Implications of the findings are discussed in the context of a consolidated correctional system.