Background: Substance use disorder is an important public health problem and one of the major causes of disability worldwide. Substance use and criminal behavior are closely related and there is a significant association between substance misuse and crime, but little is known about substance use disorder among prisoners, in particular in low-income countries. Therefore, we investigated substance use disorder and associated factors in inmates of a correctional institution in Jimma, Southwest Ethiopia. Methods: We used a cross-sectional study design to collect data from 336 prisoners from June 5 to July 5, 2017. Study participants were selected from the total of 1460 prisoners eligible for the study by a systematic random sampling technique, i.e., one participant was randomly selected from every four consecutive admissions in the registration book. Alcohol use disorder, nicotine dependence, khat abuse, cannabis use disorder, psychopathy, adverse traumatic life events, and social support were assessed. Data were entered into EpiData version 3.1 and analyzed in bivariate and multivariable logistic regression models with the Statistical Package for Social Science version 21. Variables with a P value < 0.05 in the final fitting model were declared to be associated with the outcome variable. Results: The overall prevalence of substance use disorder was 55.9%. The prevalence of khat abuse was 41.9%;alcohol use disorder, 36.2%;nicotine dependence, 19.8%;and cannabis use disorder, 3.6%. Poor social support, living in urban areas, psychopathy, and a family history of substance use were positively associated with substance use disorder. Conclusions: Substance use disorder is prevalent among prisoners. The increased morbidity and unpleasant psychosocial consequences associated with substance use disorder, together with our finding that 66.3% of prisoners with substance use disorder were interested in obtaining treatment, suggest a need to establish prison-based treatment in this correctional institution in Jimma.