Congressional efforts to rewrite the nation's immigration laws represent a potential payday for an industry already getting a boost from the current crackdown on illegal immigration: privately operated prisons.

The two biggest companies, Corrections Corp. of America and the GEO Group Inc., owe a big chunk of their recent growth to a drive by the federal government to lock up people who are in the U.S illegally. Legislation approved by the Senate would increase the federal prison population further, by 14,000 inmates annually,...