The privately-run Altcourse Prison, in Merseyside, has been praised by inspectors in a new report.
It had an extremely good environment and its work with mentally ill inmates was singled out for credit by Chief Inspector of Prisons, Anne Owers.
Her report praised the staff-prisoner relationship but criticised bullying among prisoners and procedures for inmates' first night in jail.
The prison is run by GSL UK Ltd, formerly known as Group 4.
The Director of Altcourse, John McLaughlin, welcomed the report saying he was proud of his staff.