Prison theatre, as a branch of applied theatre, operates at the intersection of integration, resocialisation, and rehabilitation, offering an alternative approach to punishment and correctional practices. Internationally, its roots reach back over two centuries, while in Hungary it gained ground from the 1990s, supported by individual initiatives and later institutional frameworks such as the National Prison Theatre Meetings. The practice encompasses diverse methods, from classical drama workshops to devised performances, serving not only artistic but also pedagogical and social purposes. Despite organisational challenges, prison theatre provides inmates with opportunities to develop interpersonal skills, empathy, and cultural access, often resulting in performances that symbolically challenge the status quo of incarceration. The study highlights its paradoxical nature: both a space of freedom within confinement and a tool embedded in the penal system. By examining historical, theoretical, and practical dimensions, the research situates Hungarian prison theatre within broader international trends while addressing questions of canonisation, reception, and the complex relationship between art, rehabilitation, and institutional control.