Police, ambulance and fire crews were dealing with a serious outbreak of violence at the Alexander Maconochie Centre on Tuesday night.
About a dozen inmates were believed to be involved in confrontations with prison officers after a fire started in a cell.
Fire crews were wary about tackling the blaze because they feared that prisoners might have weapons in a highly charged situation.
On one account, a riot broke out.
"Around 7.05pm today ACT Policing responded to a disturbance at the Alexander Maconochie Centre," the police statement said.
One person familiar with conditions inside the prison said that tension had been building there for some months because of the amount of lockdown of prisoners.
This tension existed before the coronavirus epidemic but had been exacerbated by it.
In recent years, there have been several official reviews which have painted a bleak picture of life inside.
Last year, the ACT's Inspector of Correctional Services Neil McAllister warned that overcrowding in the prison could lead to dangerous breaches of the human rights of inmates and staff.
The Inspector reported that prisoner numbers were routinely exceeding 100 per cent capacity.
"There is a limit as to how many bodies can be crammed into the AMC before conditions became intolerable and/or dangerous to detainees and staff, and the basic human rights of both are put at risk," the report read.
In addition to the overcrowding issues, the report highlighted staffing issues leading to more "lock-ins" of inmates. It also talked of a heightened risk of inmates' self-harm and suicide.
One male detainee told the review team that he was stuck in a cell for 23 hours a day; "my brain turns on itself and becomes the source my worst pain and torture," he said.
It's not known if overcrowding was behind the latest flair-up or if there was something more specific.
A week ago, a 30-year-old male detainee was stabbed with what the police called an "improvised bladed weapon".
It followed an incident in October where a prisoner was attacked by another inmate and hit three times in the head, stomped on and had boiling water poured on him, causing third-degree burns.