Purpose: Today, the criminal justice system is annually placing more than 300,000 people with severe mental illness (SMI) in prisons and jails which are neither equipped nor staffed to respond to the unique challenges of this population. This article provides a comprehensive overview of the literature that focuses on treating inmates with psychiatric disabilities who have co-occurring substance use (CODx) histories. Method: Based on a critical analysis of the literature and theoretical integration, this article focuses on reasons for the high prevalence of SMI and CODx in corrections facilities. Results: This article highlights that research has shown that effective treatment can be provided both as an in-jail service as well as through jail diversion within the community using integrated CODx treatment (Draine, Blank, Kottsieper, & Solomon, 2005). Some models focused on moving individuals with psychiatric disabilities and CODx from prison to release have shown improved recidivism rates and increased eligibility and use of postrelease treatment services (Buck, Brown, & Hickey, 2011; Wenzlow, Ireys, Mann, Irvin, & Teich, 2011). Conclusion: National alternative and innovative models, integrated treatment of CODx treatment within corrections through jail diversion and community-based services, and reentry rehabilitation challenges and approaches are discussed.