Exhibit 99.1

                     [AMERICA SERVICE GROUP INC. LETTERHEAD]


CONTACT: MICHAEL CATALANO                    S. WALKER CHOPPIN
         CHAIRMAN, PRESIDENT AND             SENIOR VICE PRESIDENT AND
            CHIEF EXECUTIVE OFFICER            CHIEF FINANCIAL OFFICER
         (615) 376-1319                      (615) 376-1346


                         AMERICA SERVICE GROUP ANNOUNCES
                        AMENDMENT TO ITS CREDIT AGREEMENT


NASHVILLE, Tennessee (August 27, 2001) - America Service Group Inc.
(NASDAQ:ASGR) announced today that it has completed an amendment to its senior
credit agreement.

         As a result of special charges discussed in its second quarter press
release, the Company had obtained a waiver of certain financial covenants
contained in the senior credit agreement. As anticipated in its recent Form 10-Q
filing, the Company today has filed a Form 8-K and reissued its second quarter
financial statements to reflect the permanent nature of the amendment and the
classification of $55 million of its bank debt as long-term debt.

         America Service Group Inc., based in Brentwood, Tennessee, is the
leading provider of correctional healthcare services in the United States.
America Service Group Inc., through its subsidiaries, provides a wide range of
healthcare and pharmacy programs for approximately 340,000 inmates. The Company
employs over 7,000 medical, professional and administrative staff nationwide.

         This press release may contain "forward-looking" statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. As such, they involve risk and uncertainty that actual
results may differ materially from those projected in the forward-looking
statements. A discussion of the important factors and assumptions regarding the
statements and risks involved is contained in the Company's filings with the
Securities and Exchange Commission.


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