Background Hepatitis C virus (HCV) infection is common among prisoners, particularly those with a history of injecting drug use (IDU). Incarcerated people who inject drugs frequently report high-risk injecting practices both in prison and in the community. In spite of rising morbidity and mortality, utilisation of HCV-related services in Australia has been persistently low. This study aimed to describe the incidence, prevalence and correlates of HCV seropositivity in a large cohort of prisoners who have injected drugs, and to identify correlates of receiving confirmation of active infection. Methods Data-linkage to a State-wide statutory notifiable diseases surveillance system was used to investigate the incidence of notified HCV seropositivity, seroconversion and confirmed HCV infection in a cohort of 735 prisoners with a history of IDU, over 14 years of follow up. Hepatitis C test results from prison medical records were used to identify correlates of testing positive in prison. Results The crude incidence of HCV notification was 5.1 cases per 100 person-years. By the end of follow up, 55.1% of the cohort had been the subject of a HCV-related notification, and 47.4% of those tested in prison were HCV seropositive. In multivariable analyses, injecting in prison was strongly associated with HCV seropositivity, as was opioid use compared to injection of other drugs. The rate of reported diagnostic confirmation among those with notified infections was very low, at 6.6 confirmations per 100 seropositive participants per year. Conclusions Injecting drugs in prison was strongly associated with HCV seropositivity, highlighting the need for increased provision of services to mitigate the risk of transmission within prisons. Once identified as seropositive through screening, people with a history of IDU and incarceration may not be promptly receiving diagnostic services, which are necessary if they are to access treatment. Improving access to HCV-related services will be of particular importance in the coming years, as HCV-related morbidity and mortality is increasing, and next generation therapies are becoming more widely available.