The US has nearly 6.9 million people - roughly 3.2% of the adult population - in prison or on probation or parole, a Justice Department report reveals.
The prison population has risen this year, the report says
More than 130,000 people were processed by the criminal justice system last year, according to the report.
Experts say the rise in numbers is the result of tough laws passed in the 1990s, which have led to more people being sent to prison - and for longer.
Texas and California have the most people on probation or parole.
The nationwide figure for the number of people on parole or probation was a record 4.8 million in 2003 - a rise of 73,000 on the previous year.
Prison population rise
Of those discharged from parole in 2003, 38% ended up back in prison because they had committed fresh crimes or technical violations.
The report revealed nearly 1.4 million people are in state and federal prisons, while local and county jails house an additional 700,000 inmates.
The total number of people serving time is around 2 million.
The report also revealed 41% of people on parole last year were black, while 40% were white.
The rise in the number of people in prison or on probation or parole has happened despite nationwide crime rates remaining relatively stable and despite efforts by some states to introduce softer sentencing laws in an attempt to cut prison costs, the New York Times newspaper says.