Inverness Prison has problems with overcrowding, HM Chief Inspector of Prisons for Scotland has said.
David Strang inspected the jail in February.
He said at the time of his visit it was holding 26 more prisoners than its 103 capacity, and he found the building in need of a "degree of refurbishment".
However, Mr Strang also said he had given the prison an "overall good report" and had highlighted areas of good practice.
HMP Inverness is Scotland's smallest prison and one of the oldest.
It was built more than 100 years ago and in 2008 was described as one of the most overcrowded in Scotland.
There are plans to build a new prison to serve the Highlands at an estimated cost of £52m.
Mr Strang's new inspection report contains 56 recommendations and has identified 11 areas of good practice. The main findings include:
- Positive relationships between staff and prisoners.
- Prisoners felt safe and levels of recorded violence were relatively low.
- Prisoner accommodation dating from 1902 was overcrowded and required improvements.
- The number of activities for prisoners was limited, however, "high quality work" was available in the kitchen and in recycling.
- The laundry service was assessed to be of "exceptionally high quality", in comparison with other prison laundries.
Mr Strang said: "This is a time of change for the Scottish Prison Service with the recent publication of its organisational review and with the opening of HMP Grampian to replace both HMP Aberdeen and Peterhead.
"This has created a degree of apprehension for staff with regards to if and when a suitable site for a new HMP Inverness will be confirmed.
"It is therefore to the credit of staff and management that they continue to deliver in challenging surroundings and general overcrowding."
In 2011, the Scottish government said it would cost about £52m to construct a new prison in Inverness.
The previous year, the Scottish Prison Service (SPS) was told it could not build a new prison on land where a new academic and research campus is being built in Inverness.
The SPS had been in discussion with landowner Highlands and Islands Enterprise (HIE) about constructing the jail at Beechwood.
HIE said the plan was given serious consideration but it did not have "a strong strategic fit" with its vision.
It offered to help the SPS find another site.