From 1949 to 1961, the penal system consisted of labor or internment camps and prisons with three types of disciplinary regimes. By 1961 the regime claimed it had abolished the labor camps. A law eliminated these different regimes, but a new system containing four regimes has been instituted since. Confinement to penitentiaries was the most severe regime under the new system, while local jails provided the lightest. Prisoners sentenced to the two intermediate regimes were assigned to one of two different types of prisons. In 1975 the government introduced an additional regime for convicts who committed for the fourth time a violent crime carrying a sentence of more than one year.

In July 1989, a prisoner in the Vac Prison north of Budapest committed self-immolation, and several hundred of his fellow prisoners went on a hunger strike to protest the harshest possible regime. The government immediately promised to abolish this regime, thus affecting 282 male and 14 female prisoners.

In the late 1980s, the HPA possessed just one penal battalion, located in Nagyatad in Somogy County. Soldiers who had received seven-month to two-year sentences were sent there to perform manual labor, primarily for the HPA but often for the national economy. Alcohol played a part in two-thirds of crimes committed by soldiers. At least one-third of these crimes involved violence against superiors, insubordination, or draft dodging.

Data as of September 1989