Staff at the privately-run prison Rye Hill prison are being bullied by inmates, the jail watchdog says.
Chief Inspector of Prisons Anne Owers has demanded urgent action after finding unsafe conditions at the Warks jail, which is run by GSL UK Ltd.
Inexperienced officers ignored evidence of contraband and misbehaviour to "survive," the report said.
GSL has been fined nearly £95,000 by the Home Office for poor performance of the jail, which said it will improve.
Staff were working in pairs, or sometimes alone, on wings with more than 70 inmates, some of whom reported knives, drugs and alcohol are available, said the report.
"During the inspection, a death occurred which resulted in a murder investigation," said Ms Owers.
"[And] prisoners said that they themselves sorted out fights and bullying and we saw evidence of staff being bullied by prisoners.
"It was by no means apparent to us that the inexperienced and poorly supported staff group were fully in control of the units.
"So great were the concerns that I asked for immediate and decisive action to be taken."
Immediately before the inspection, the report detailed how there had been an apparent suicide, a hostage situation, extensive indiscipline and a rise in positive drug tests.
The number of assaults on staff had also more than doubled in the two years before the inspection, from 20 in 2003 to 47 in 2004.
Rye Hill jail opened in 2001 as a Category B jail with a capacity of 600.
Staff turnover is currently running at 40% a year, the report said, with a third of staff working there less than six months.
One inspector reported seeing a group of inmates behaving "like a mob" outside an office and behaving aggressively towards a young officer.
"The atmosphere was hostile, intimidating and escalating," the report said.
Rye Hill's new director Alan Bramley said: "In the introduction to her report, Anne Owers said that at the next inspection of Rye Hill she expects to see significant and sustained improvement.
"We are working hard to bring about that improvement and are confident that we will."