In May 2006, the Department of Public Health investigated a tuberculosis (TB) outbreak at a correctional facility after two recently discharged inmates were diagnosed with TB. Based on epidemiological and genotyping data, one infectious patient was determined to be the source of infection for the other. Despite prolonged symptoms and abnormal chest radiographs, the index patient was not diagnosed while incarcerated. Among the estimated 910 exposed inmates tested, 53 (5.8%) had newly positive tuberculin skin tests (TSTs). Ten (2.1%) of 485 corrections staff tested converted their TSTs. This investigation highlights the consequences of missed TB diagnoses in prisons.