With over two million inmates, the United States’ prison population is the largest in the world. Nearly one in one hundred Americans are behind bars, either in prisons or pre-trial detention facilities. The rapid growth in incarceration is well-documented. However, social science explanations often stop at the prison gates, with little work on treatment inside prisons. This black box approach ignores important bureaucratic decisions, including the provision of rehabilitative services and the application of punishment. This dissertation offers a systematic analysis of treatment decisions inside the American prisons. I use a mixed methods approach, combining multiple quantitative datasets with environmental observation at four prisons, and original interviews of twenty-three correctional staff members. I offer the only large-n comparative analysis of American state prisons. Characteristics of the inmates as well as characteristics of staff are explored. I am able to analyze data at the state, facility and individual level. All of this is to answer a crucial and somewhat overlooked question; how do prison staff decide who should be punished and who should receive rehabilitative treatment? I find that theories of social construction offer insight into the treatment of American prison inmates. Specifically, I find that socially constructed racial categories offer explanatory value for inmate treatment. Black and Hispanic inmates are less likely to receive important rehabilitative programs, including access to mental health and medical care. Black and Hispanic inmates are also more likely to receive punishment including the use of solitary confinement in administrative segregation units. I find, consistent with theories of representative bureaucracy that staffing characteristics also impact treatment decisions, with black and Hispanic staff members expressing lower preferences for punishment and prisons with higher percentages of black staff members utilize administrative segregation less. I provide a historical overview of the changing social constructions of crime and prisons inside the United States, from colonial to present day America. I argue that the treatment of prisoners changes as our conception of crime changes. I discuss recent bipartisan attempts at prison reform and offer my own suggestions for reform of the American prison system.