To determine whether infection with human immunodeficiency virus (HIV), hepatitis B virus (HBV) or hepatitis C virus (HCV) occurred after two potential episodes of exposure through needle- and syringe-sharing in Australian prisons, and to examine use of post-exposure prophylaxis (PEP) against HIV infection in the prison setting. Cohort study of potential contacts of two prisoners infected with HIV, HBV and HCV followed up for up to 14 months. Two Australian prisons between November 2000 (time of exposure) and December 2001. Two index patients (both infected with HIV and HCV; one also infectious for HBV) from two different prisons, and 104 inmates who shared needles and syringes. Seroconversions to HIV, HBV and HCV related to the high-risk exposure and uptake and completion of HIV PEP determined from medical records of inmates. There were four seroconversions to HCV within 14 months of the potential exposure (14% of those susceptible in the cohort), but no recorded HIV or HBV seroconversions. Forty-six inmates (82% of those eligible) were offered PEP, and 34 of these (74%) elected to receive it. Only eight (24% of the 34) completed the full PEP course. HCV transmission in the prison setting is related to high-risk needle- and syringe-sharing. Administering HIV PEP in the prison setting is complicated by challenging risk assessment and follow-up.