Three prisoners were found sharing cells made for two inmates
Inverness Prison is one of the most overcrowded in Scotland and the women's unit shows what is "best and worst" about it, an inspection has found.
HM Chief Inspector of Prisons, Dr Andrew McLellan, said a new prison for the Highlands was needed.
He reported inmates sleeping on mattresses on cell floors and female prisoners having little to do.
However, Dr McLellan praised staff for running a safe prison with high quality healthcare and low drug abuse.
His visit was made without advance warning last November.
Among the main findings of his newly-released report were three prisoners sharing a cell on occasions, unacceptable living accommodation and few prisoners having useful work to do.
Little improvement have been made to the reception, while the gym and visits room were in as bad a state as a previous inspection report.
Dr McLellan said: "The small unit for women prisoners shows the best and the worst of the prison.
"Relationships between staff and prisoners are particularly good: all of the prisoners present during the inspection spoke of the caring and supportive attitude of staff.
"On the other hand there is very little for women to do."
He said a new prison was needed to serve the Highlands and as an answer to the overcrowding at Inverness.
The opportunities for women to maintain contact with families was applauded.
Dr McLellan also highlighted what appeared to be low levels of violence, illegal drugs and bullying.
He said: "Much that has been found good in the past continues to be good.
"The food is excellent. Relationships between prisoners and prison staff are also very good."
His report comes amid concerns about overcrowding in Scottish prisons and the numbers of women being jailed for drink-fuelled violent crimes against other women.
In 2006, the retiring governor of Inverness jail, Alastair MacDonald, told BBC Scotland that the prison service had suffered years of neglect.
He also raised concerns that prisons were being turned into a social service for the vulnerable.
At the time Justice Minister Cathy Jamieson defended the Scottish Executive's record of prison reform.