There are more than a million prison and jail inmates in the United States who have mental illness. As funding for State Hospitals has decreased, funding for needed community programs has often not kept pace. This has led to a population of homeless mentally ill, many of whom have co-occurring substance use disorders. Society's perhaps unconscious response has been to create 24 hour mental health units within prisons and jails. The authors contend that by doing so, we have 're-criminalized' mental illness. The mentally ill prisoner is most often the victim of extreme family turmoil including physical and/or sexual abuse, parental substance dependence, and parental incarceration. Prisons and jails most often do not provide services for this highly traumatized population or recognize the need for such services. The authors report on problematic aspects of mental health care in prisons, and on several attempts to establish 'trauma-aware' care within the legal system.