HMP Hatfield opened as a borstal in 1950. Over the years it was reassigned to a prison and young offender institution, housing 180 young offenders. In July 2000, one unit became designated for 60 category D adults with an emphasis on resettlement; in March 2002, the prison shared services with Moorland prison and young offender institution, with one governor responsible for both sites. In September 2002 both sites merged and two additional accommodation units were erected due to population pressures. It gradually evolved providing accommodation for 226 adults and 40 young offenders.
In November 2010, the prison reverted to the name HMP/YOI Hatfield. In July 2011, it was announced that Hatfield, along with HMP/YOI Moorland and HMP Lindholme, both large, closed category C prisons, would be part of the PCP 2 market testing programme. The Prison Service had bid to manage the three prisons in a clustering arrangement, but the contract was initially awarded to the private sector, a decision which was subsequently reversed in 2013, and the prison remained in public ownership run by HMPS.
HMP/YOI Hatfield is now a category D resettlement prison, formerly known as Moorland open, as part of HMP Moorland. During 2012–13, Hatfield was part of the South Yorkshire cluster but has since focused on becoming a stand-alone resettlement establishment. Hatfield officially separated from HMP Moorland in April 2014 and has also taken over the previous HMP Lindholme I wing, known as The Lakes site, which since June 2015 has been used to accommodate all new arrivals for an initial three-month period before they progress to the main Hatfield site. It is part of the Yorkshire & Humberside region.
There are currently eight residential units, A, B, C, D, E and F on the main site and G and H on The Lakes site (approximately four miles from the main site). A, B and C units – 20 rooms per landing across three floors. D and E units – accommodate 40 prisoners across two floors. F unit – a self-contained six-bed unit that provides independent living for six prisoners. G and H units – each accommodates 56 prisoners; H unit opened in August 2015.