Prisons hold a disproportionate number of society’s drug abusers. Approximately 50% of state prisoners meet the criteria for a diagnosis of drug abuse or dependence; however, only 10% of prisoners receive drug treatment. Diverting offenders to community-based treatment has been shown to generate positive net social benefits. We build on a lifetime simulation model of a nationally representative state prison cohort to examine diversion from reincarceration to community-based substance abuse treatment. We find that diversion provides positive net societal benefits to the United States and cost savings to the national criminal justice system. Our study demonstrates the societal gains from improving access to the community drug treatment system as an alternative to prison.