A report by Guam's public accountability office says the island's prison is almost double its capacity, and has no plan to deal with anticipated population growth.
The report says there are over 700 inmates, with four prisoners being held in cells designed for a single inmate.
It also found prisoners housed in "temporary canvas-like structures", as well as in the library, classrooms and offices.
The Pacific Daily News says the report also found the Department of Corrections lacks any clear plan or strategy to address anticipated population growth, reduce recidivism and encourage the reintroduction of prisoners into society.
The report says the department is putting itself at risk of lawsuits and federal receivership, while jeopardising the welfare of employees, prisoners and the general community.
In response, Republican Senator Brant McCreadie says he plans to introduce a bill to build another prison for Guam.