Texas historically has one of America's highest incarceration rates per capita but has slipped to its lowest level since 2008, falling to fourth overall among the 50 states.
Some experts said the state's increasing reliance on rehabilitation programs has been the key.
The Austin American Statesman reported on Sunday that last month Texas' prison system posted its lowest head count since 2008, even as the state's overall population booms.
Instead of 156,500 prisoners behind bars in the state's 111 state prisons in 2011, the lockups this year held about 154,000 -- a drop of about 2,500.
Experts say that a decrease in crime rates, changes in demographics and an aging state population mean fewer prisoners.
But Texas judges are also increasingly sentencing offenders to alternative treatment and rehabilitation programs.