Some shared cells at Northerallerton's Young Offender Institution are unhygienic and unfit for purpose, according to a new report.
Chief Inspector of Prisons, Anne Owers, said the institution was improving and generally safe, but there was much more work to be done.
Concerns were raised over insufficient education and work opportunities.
Inspectors said the establishment was exaggerating the time prisoners spent out of their cells and being active.
But the prison said it had reported the figures in accordance with national guidelines and its area manager was satisfied the information was authentic.
The report also found the only safe cells available for inmates at risk of self-harm were in the segregation unit, and in one incident the emergency call bell had been muffled.
There was also insufficient access to phones and showers, it said.
But inspectors congratulated the prison on its practical and down to earth approach, and said it identified "key resettlement needs" when prisoners first arrived, and provided an "impressive array of reintergration options".
They found the facility had sound induction and anti-bullying procedures, though first night arrangements needed better organisation.
Inspectors also found appropriate use of force and low levels of substance abuse.
Anne Owers said: "Overall, Northallerton is achieving a considerable amount within the limits of its fairly meagre physical and financial resources.
"There is much more to do, some of it requiring capital investment, some building on current improvements and some concerned with eradicating inappropriate behaviour - but the establishment's direction of travel is upwards".
Phil Wheatley, Director General of the Prison Service, said the report identified a number of areas where the prison needed to improve, but inspectors had made it clear Northallerton was an improving prison.
He said: "I am confident that the Governor and the staff will rise to these challenges and that the progress being made at Northallerton will continue."
The inspection took place in October last year.