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Using data of literacy skills assessed for nationally representative samples of adult population in households and prisons (2003 National Assessment of Adult Literacy), we compare literacy skill levels between prisoners and adults in general households for native-born black and white men, respectively. Even before controlling for any individual and familial characteristics, black prisoners show higher, not lower, levels of literacy skills than their counterparts in households. Taking into account individual and familial characteristics only increases the gap in literacy proficiency favoring black prisoners. White prisoners also do not show any significant difference in literacy from their counterparts in households, net of individual and familial characteristics. Our supplementary analysis, which examined the relationship between prior cognitive skills and incarceration using longitudinal data that followed up youths (NLSY 97), suggests that the higher level of literacy skills among current prisoners than adults in households should reflect what prisoners do behind bars. We find that prisoners are actually more frequently engaged in everyday literacy activities (reading and using the library) inside bars than adults outside bars, and this difference explains a substantial portion of the higher literacy scores among prisoners than adults in households, particularly among black men.