More than 14,000 people were imprisoned in NSW as of March 2026, the highest figure ever recorded, according to the state's Bureau of Crime Statistics and Research (BOCSAR).
The surge has been driven by a record high number of people being held on remand, which is those charged but not convicted who are often awaiting trial.
This has not been caused by a change in crime rates, but by police laying more charges - particularly over domestic violence offences.
The uptick reflected similar charging patterns in the aftermath of the 2014 Lindt Cafe siege, where a man on bail held 18 people hostage in the Sydney CBD.
"The Lindt Cafe siege had particular issues around that offender and questions about his release on bail," NSW BOCSAR executive director Jackie Fitzgerald told AAP.
"That was a bit of a wake-up call and a shake-up for the judiciary, and we did see a sharp change in bail decisions after that at a similar magnitude."
But unlike aftermath of the hostage situation, bail refusal rates have not changed and instead there has been an influx of people entering the criminal justice system.
Between November 2025 and March 2026, the number of inmates in NSW rose by 8.2 per cent, revealing the population has increased more over four months than in the previous four years.
Almost half of all people in custody are on remand, with 41 per cent of this increase attributed to those charged with domestic and family violence.
This can be compared to 14 per cent charged with sexual violence, 13 per cent for non-domestic violence assault, and 10 per cent for weapons offences.
The figures reflect NSW Police's increased focus on domestic violence, which Ms Fitzgerald said was a welcome development.
But she said more effort must be invested in approaches outside the justice system.
"We have to look at strategies to keep victims safe and prevent these offences from occurring ... so we don't have a situation where the expensive justice system is our go-to strategy for responding to domestic violence," Ms Fitzgerald said.
While she acknowledged prisons could help incapacitate offenders and keep victims safe, this may not be viable in the long-term.
"If this is what policing looks like in NSW going forward, then we will have to expedite increasing capacity," Ms Fitzgerald said.
"That could mean bringing forward the building of a new prison and that's a very costly exercise."
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