Alderson Federal Prison Camp opened in 1927 as the Federal Industrial Institution for Women. Its first warden was Mary B. Harris. The prison complex is located near Alderson on the Greenbrier River in Summers County.

Prior to the construction of Alderson Federal Prison Camp, there was no federal women's prison. Women who had committed federal violations were incarcerated in separate sections of penitentiaries for men, state prisons, jails, and houses of correction throughout the United States. Few of these facilities were modern, and they offered few if any programs for the rehabilitation of women prisoners.

The Alderson prison was established in large part through the effort and inspiration of Mabel Walker Willebrandt, the first woman appointed U.S. assistant attorney general in charge of federal felons. The recreational hall at Alderson was named after Willebrandt. The prison architecture resembles that of a college campus.

The federal Industrial Institution for Women later became the Federal Reformatory for Women, and in November 1988 the name was changed to Alderson Federal Prison Camp. Alderson was the first federal institution for female offenders, and is now the largest minimum-security facility in the federal prison system. The prison employs 195 full-time staff members, and has a capacity of 677 inmates. Inmates represent every state and several foreign countries. Over the years, the prison has housed some famous female inmates including singer Billie Holiday, radio propagandists Axis Sally and Tokyo Rose, Charles Manson cult member Lynette "Squeaky" Fromme, and television host Martha Stewart.

The prison is fully accredited by the American Correctional Association, Commission on Accreditation for Correction.