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Scholars have long studied the causes and consequences of both ethnoracial segregation and mass incarceration in the U.S. in part because of their entanglement with durable inequality. Yet few studies directly explore the relationship between prison proliferation and segregation. While many associate prison proliferation with rural areas, the majority of the over 1,600 state and federal adult prisons today are located within metropolitan areas, including over 500 in suburban areas. Cities and suburbs with prisons also have higher levels of residential segregation than those without. In this paper, I ask: To what extent do prisons serve as segregating forces in the communities where they are located, either increasing segregation or impeding desegregation? Drawing on over 50 years of Census, survey, and administrative data, I leverage the generalized synthetic control method to estimate the causal effect of prison openings on residential segregation. I find that as racial segregation trended downward in the decades after 1970, prisons worked against neighborhood desegregation and increased between-city segregation—albeit with heterogenous effects. My findings suggest that prison proliferation, a late twentieth century racial project, can be understood as an overlooked redirection of the state’s segregating efforts outside of housing policy. Prisons racially and economically differentiate metropolitan space with implications for scholarship on the carceral state, racial and economic inequality, and the suburban and rural places most impacted by the prison boom.