The pair made a break from the Indonesian resort island's main prison by cutting a hole in the roof with a hacksaw, authorities said. It was not clear how they obtained the tool.
Police are now scouring the palm-fringed island and handing out pictures of escapee Chrishan Beasley, a 32-year-old arrested in August for carrying five grams of hashish.
Foreigners are regularly arrested for drugs offences on Bali. Beasley was awaiting a sentencing in his case. It was not immediately clear how much jail time he was facing, but Indonesia has some of the world's toughest drugs laws, with the death penalty available in some trafficking cases.
Beasley's accomplice in the escape, convicted thief Paul Anthony Hoffman, 57, was apprehended before he could make good on the escape.
Drug pusher gets four-year jail term
"Paul was immediately recaptured by the locals who saw him trying to escape while Chrishan, who climbed up before him, managed to run away," Kerobokan chief warden Tonny Nainggolan said. Hoffman is serving a 20-month sentence for robbing a number of convenience stores at knifepoint.
Kerobokan houses some of the country's most notorious and high-profile inmates, including members of the so-called Bali Nine which plotted to bring heroin into Australia via Bali. Two members of the group have been executed.
Jailbreaks are common in Indonesia, where inmates are often held in unsanitary conditions at overcrowded and poorly guarded prisons.
In May, more than 200 inmates staged a mass breakout from an overcrowded prison on Sumatra island, while last year a convicted child murderer escaped from jail by putting on a woman's Muslim veil, make-up and sunglasses and walking out past unsuspecting guards.
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