The relationship between crime and incarceration is vexed. Some scholars suggest that incarceration deters crime. Others suggest that incarceration can increase crime in certain situations by undermining the social fabric and making the environment more criminogenic. Most of the empirical work on the question is undertaken at an aggregate level (county, state, or national data). Yet, criminologists have long argued that the complex intertwining of crime and punishment is best understood at the neighborhood level, where the impacts of incarceration on social relationships are most closely felt. This paper examines the question using a panel of neighborhoods in Tallahassee, Florida for the period 1995 to 2002. I find evidence to support the contention that the high levels of prison admissions and prison cycling (admissions plus releases) is associated with increasing crime rates in disadvantaged neighborhoods. This effect is not found in other neighborhoods. Looking more closely at the issues of race and class, I find that while marginalized neighborhoods experience slightly higher crime rates, they are faced with much higher incarceration rates. In Black neighborhoods in particular, prison admissions are an order of magnitude higher in comparison with non-Black neighborhoods even though underlying crime rates are not very different.By employing incarceration-the bluntest of instruments-as the primary response to social disorder, policy makers have significantly missed the mark. The very laws intended to punish selfish behavior and to further common social interests have, in practice, strained and eroded the personal relationships vital to family and community life. Crime cannot go unpunished. But by draining the Crime Law Soc Change (2012) 57:521-538