Multidrug-resistant tuberculosis (MDR-TB) threatens the progress of global control efforts. Prisons represent a high risk setting for development and transmission of MDR-TB. In a Siberian TB referral prison (Kemerovo region), the treatment failure rate is 35% (June 1996-March 1997), despite implementation of a strict DOTS program and use of the World Health Organization Category 2 re-treatment regimen for all new cases. Among 164 patients (December 1997-March 1998), initial resistance to isoniazid and rifampin is 22.6%. Such a rate is a warning call to reconsider prison control strategies, and importantly, to address the treatment regimens necessary to combat an institutional epidemic of MDR-TB.