Growing prison populations in the U.S. are largely due to drug-related crime and drug abuse. Yet, relatively few inmates receive treatment, existing interventions tend to be short-term or non-clinical, and better methods are needed to match drug-involved inmates to level of care. Using data from the 1997 Survey of Inmates in State Correctional Facilities, a nationally representative sample of 14,285 inmates from 275 state prisons, we present a framework for estimating their levels of treatment need. The framework is drawn partly from the American Society of Addiction Medicine Patient Placement Criteria and other client matching protocols, incorporating drug use severity, drug-related behavioral consequences, and other social and health problems. The results indicate high levels of drug involvement, but considerable variation in severity/recency of use and health and social consequences. We estimate that one-third of male and half of female inmates need residential treatment, but that half of male and one-third of female inmates may need no treatment or short-term interventions. Treatment capacity in state prisons is quite inadequate relative to need, and improvements in assessment, treatment matching, and inmate incentives are needed to conserve scarce treatment resources and facilitate inmate access to different levels of care.