The Italian penitentiary system identifies inmates’ re-education as the main aim of personal detention (Law no. 663, dated October 10th 1986). Among others, theatrical performances are key initiatives aimed to promote the inmates’ social reintegration. Prison theatre allows the establishment of a performing space, which paves the way for the activation of innovative learning processes. Drawing on value co-creation theory, this paper investigates the prison theatre phenomenon, which is considered as an social entrepreneurial opportunity, paving the way for positive outcomes both within and outsides the boundaries of penal institutions. An in-depth exploratory case-study was performed. It concerned the prison theatre initiatives launched by the Penal Institution of Naples-Secondigliano, located in Southern Italy. A qualitative approach was adopted, which allowed to deal with the research topic from both a conceptual and an empirical standpoint. To improve the reliability of this study, the evidence collected were drawn from multiple sources, including: 1) internal archives of the Italian Ministry of Justice; 2) semi-structured interviews; and 3) external sources. The relevance of this study is twofold, contributing in both conceptual (observation) and theoretical terms (abstraction) to a widely overlooked shade of value co-creation. Indeed, to the authors’ knowledge, penal institutions are still poorly examined by scholars interested in value co-creation, in spite of their role in enhancing both social and economic development in current societies. The case-study discussed provides an in-depth exploratory analysis of prison theatre. The research findings point out the key tools to make prison theatre a physic and symbolic place, where inmates are able to build knowledge and can “reborn” through the process of knowledge sharing. This study paves the way for two important contributions: 1) it encourages a cross-fertilization between management studies and juridical, sociological and pedagogical disciplines, which are relatively more rooted in the penitentiary environment; 2) it incites an improvement of traditional managerial and organizational practices in the penitentiary system, conceptualizing prison theatre as a social entrepreneurial opportunity.