Background Major mental disorders in prison populations have been recognised as a long-term problem with an important impact on public health. Despite this, screening activities in prisons are still weak in Latin America. We proposed to estimate the prevalence of depression and psychosis and associated factors in the largest Ecuadorian prison for male inmates. Methods Cross-sectional study with 309 prisoners chosen at random between January and February 2017, who were administered two structured questionnaires. The first examined socio-demographic and occupational characteristics prior to incarceration and presence of social support networks; the second was the Mini International Neuropsychiatric Interview version in Spanish 5.0.0. We used maximum likelihood tests and multiple logistic regression to assess associations between depression, psychosis and study factors. Results The prevalence of depression and psychosis were 50.2% (95% CI 44.6–55.8) and 25.9% (95% CI 21.0–30.8), respectively. The two conditions occurred together in 22.0% of the cases (95% CI 14.8–29.2), and depression or psychosis (D/P) was found in 54.0% (95% CI 48.4–59.6). Consuming drugs while in prison was found in 41.4% (95% CI 35.9–46.9). When age was considered among those consuming drugs, the prevalence of D/P were 72.2, 88.0, and 92.3%, respectively for the age-groups 18–29, 30–39 and 40 years or over ( p -value < 0.001). Using a multivariate model, we found that not receiving visits (AOR 3.15 95%CI 1.42–6.96) and consuming drugs while in prison (AOR 5.85 95%CI 3.06–11.16) were associated with D/P, while the age effect disappears. Inmates who stopped drug consumption in prison or who had never consumed did not present any significant differences. Conclusions Depression and psychosis in prisoners are strongly affected by the absence of visitors and by consumption of drugs in prison. Greater presence of social support networks and preventive actions targeting drug abuse would contribute to improving the mental health of prison inmates.