Purpose: The paper gives a brief overview of the history and past developments of prison rehabilitation in the Republic of Serbia, as well as a more detailed description of present situation in the domain of the execution of institutional penal sanctions, in both normative and practical aspects. Design/Methodology/Approach: For the purpose of the analysis, legislative documents were taken into account, as well as official data and reports of the Prison Administration of the Ministry of Justice and NGOs reports. Findings: The new treatment concept is based on the latest scientific achievements on crime and experiences of modern and developed penal systems Europe-wide. It is primarily focused on better classification of convicted persons ...