Large numbers of individuals in U.S. prisons meet DSM criteria for severe psychiatric disorder. These individuals also have co-occurring personality and substance abuse disorders, medical conditions, and histories of exposure to social pathologies. Based on nine months of ethnographic fieldwork in a U.S. prison, focusing on staff narratives, I utilize interpretivist and constructivist perspectives to analyze how mental health clinicians construct psychiatric disorder among inmates. Discrete categorization of disorders may be confounded by the clinical co-morbidities of inmates and the prison context. Incarcerated individuals’ responses to the institutional context substantially inform mental health staffs’ illness construction and the prison itself is identified as an etiological agent for disordered behaviors. In addition, diagnostic processes are found to be indeterminate, contested, and shaped by interactions with staff. Analysis of illness construction reveals that what is at stake for clinicians is not only provision of appropriate treatment, but also mandates for the safety and security of the institution. Enmeshed in these mandates, prison mental health becomes a particular local form of psychiatric knowledge. This paper contributes to anthropological approaches to mental disorder by demonstrating how local contexts mediate psychiatric knowledge and contribute to the limited ethnographic record of prisons.