Obama arrived at El Reno Federal Correctional Institution in Oklahoma, where he is to meet officials and inmates and speak about proposed reforms.
Nearly a quarter of the world's prison population is concentrated in American jails. The United States accounts for less than five per cent of the world's population.
Obama wants to cut the number of people incarcerated, as well as curbing the use of solitary confinement and ending mandatory minimum sentences.
The entrance to El Reno Federal Correctional Institution in El Reno, Oklahoma, July 16, 2015, as US President Barack Obama arrives for a visit. PHOTO: AFP
"Our criminal justice system isn't as smart as it should be," he said this week, after commuting the sentences of 46 non-violent drug offenders.
"It's not keeping us as safe as it should be. It is not as fair as it should be. Mass incarceration makes our country worse off."
The United States jails as many people as the top 35 European nations combined, with African-Americans and Latinos disproportionately put behind bars.
Read: US names new envoy to lead Guantanamo Bay prison closure
Black and Latino Americans represent 60 per cent of the prison population while only around 30 per cent of prisoners are white.
The US prison system has seen an explosion in costs. At $80 billion, the budget for prisons represents a third of the Department of Justice's annual spending.
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