It is widely documented that prisons in Ethiopia are inhumane and substandard and that inmates serving time in prison are mistreated and neglected. Yet, not much is known about the reason why the correctional system fails to be an agent of rehabilitation. By employing focus group discussion (FGD) and in-depth interview to collect data from prison inmates and prison staff, this study examined the factors that affected prisoner rehabilitation at Hawassa correctional facility, Southern Ethiopia. The finding of the study suggested that Hawassa correctional facility failed to fulfill its primary function of correction. A range of institutional- and inmate-related factors counteracted the very role of the institution as a rehabilitative agent. Six key factors were identified as barriers to successful prisoner rehabilitation: inadequacy of treatment personnel, underfunding of programs, absence of treatment personnel on administrative positions, weak inmate classification system, correctional officers’ low level of treatment orientation, and the inmate subculture. The prison administration, in alliance with other stakeholders, should put in place the requisite reform to address these barriers associated with prisoner rehabilitation.