Jason Corralez donned a freshly pressed collared shirt. He had shaved neatly around his salt-and-pepper goatee. He looked like a man about to go on a job interview, which he was. It was a job he desperately wanted, but one question gnawed at him: Would they be willing to hire a convicted murderer?

Mr. Corralez had one advantage as he applied for the position at Trader Joe's in the Westwood neighborhood of Los Angeles. Both his brother-in-law and nephew worked at the grocery store. But as his wife drove him to the interview, Corralez was worried about that question on the application that asked if he had ever been convicted of a felony. He had written: "Will discuss during interview."

When he arrived at the store, the manager queried him about his résumé. Corralez went through his work experience, which all happened to be from his time in prison, where he had been since he was 17: upholstery work, yard maintenance, small engine repair, clerical tasks. "I explained my job experience," he says. "All the courses I took – anger management, morals and values."

Corralez didn't leave out why he went to prison, either. "I'm an ex-felon for the offense of second-degree murder," he told the manager. A former member of The Mob Crew, an East Los Angeles gang, he served 24 years for killing a member of the rival MS-13 gang in a drive-by shooting. "This is the person I was," he said, "and this is the person I am now."

According to Corralez, the manager stepped back, stunned. "Thank you for being honest," Corralez recalls him saying. As the ex-prisoner walked to the bus stop, he knew what it meant. "I took everything that I had accomplished, everything that I had to do to get a second chance," he says. "But I could see it in his reaction. It was like the nail in the coffin."

Corralez's struggle to transition from prisoner to free member of society is one that thousands of inmates across the country are going through as states trim their prison populations on a scale unseen in American history.

From California to New York, Texas to Michigan, a record number of convicted criminals are either being released from cells or serving time in community-based programs as states, under pressure to cut costs, adopt new philosophies on how to handle nonviolent offenders and many inmates incarcerated in the 1970s and '80s near the end of their terms. In some cases, lawsuits designed to reduce overcrowding are forcing authorities to open prison doors as well.

These days roughly 700,000 ex-cons are hitting US streets each year – a new high, according to Marc Mauer, executive director of the Sentencing Project, a Washington-based advocacy group. While the vast majority of the inmates are nonviolent, some, like Corralez, served sentences for serious crimes and are now winning parole in higher numbers.

The result is an unprecedented test – of authorities' ability to monitor the newly released prisoners, of social service groups' capacity to help them forge new lives, of the inmates' willingness to start over, of communities' tolerance to let them do so.

Nowhere is this social experiment playing out with more intensity than in California, the nation's largest jailer. It is looking to move as many as 33,000 prisoners out of state penitentiaries over the next year alone, many of whom could end up on the streets. It will provide the country's clearest look at how ready many criminals are to be on the outside – and society's readiness to have them there.

* * *

America's arc in getting to this point involved a lot of clanking cell doors. From 1973 to 2009, the US prison population grew by more than 700 percent – the result of an uptick in crime, huge numbers of drug arrests, and tough sentencing laws. At the end of that time more than 1.6 million people sat behind bars in federal and state penitentiaries, the largest inmate population in the world.

Yet in 2010, for the first time in 38 years, the US prison population declined. Experts cite myriad reasons for the modest (0.3 percent) drop: a decrease in crime in many cities, more use of alternative sentencing, and fewer people put back in prison for parole violations. Early release of inmates for good behavior was also a factor.

Half the states in the country reported a decrease in their prison populations last year. The number of inmates in Michigan, which hit a peak of 51,500 in 2006, now sits around 43,500. The state has closed down 17 penitentiaries and prison camps as a result.

Similarly, New York State has emptied more than 15,000 prison beds over the past decade, mostly through sentencing reform. New Jersey's prison population has dipped, too, in part because of early parole grants. Even rawhide-tough Texas gave up plans five years ago to build eight new prisons, channeling the money instead into probation programs, outpatient treatment, and drug courts.

"We're starting to see a triumph of sound science over sound bites," says Adam Gelb, who studies criminal justice issues at the Pew Center on the States, a Washington research group. "State leaders from both parties are adopting research-based strategies that are more effective and less expensive than putting more low-risk of-fenders into $30,000-a-year taxpayer-funded prison cells."

While states are emptying cell beds for different reasons, the one common motive is the high cost of keeping so many people behind bars. States now spend more than $51 billion a year on prisons – the equivalent of the gross domestic product of Syria. Prisons represent one of the fastest-growing items in state budgets at a time of pressing fiscal penury. Many states face fraught decisions over whether to spend money on classrooms or concertina wire.

Reducing prison budgets, in part by sentencing nonviolent offenders to programs outside prison walls, is one of the few issues many groups on the left and right now agree on. "There's more cooperation on this topic than on any other that I can think of right now," says Marc Levin of Right on Crime, a conservative group whose supporters include former presidential candidate Newt Gingrich, antitax crusader Grover Norquist, and former Florida Gov. Jeb Bush.

California faces the same pressures as other states and some unique to itself. It has long taken a tough stance on sentencing, which has contributed to a ballooning prison budget. It doubled during the eight-year tenure of Gov. Arnold Schwarzenegger (R) alone, reaching $9.5 billion.

Yet the immediate impetus for the state's sudden push to reduce its prison population comes from the courts. Overcrowding in the state's 33 prisons had reached more than 200 percent of designed capacity. In some cases, prisons were housing inmates in gymnasiums on bunk beds stacked three high.

Ruling in a prisoners' rights lawsuit, a federal court ordered the state to cut overcrowding to 137.5 percent of capacity. At first the state resisted. But then, last May, the US Supreme Court upheld the ruling. The result is a far-reaching and controversial "realignment" plan – a move to reduce the state prison population by shifting thousands of inmates to local facilities and ordering others to serve time in community-based programs.

Under the plan, those convicted of "non-serious, non-violent, non-sex offenses" will serve their time in county jails instead of state prisons. People on parole or probation who violate their release conditions will serve their new sentences in county facilities, too. Already, since last October, corrections officials say they have reduced the state prison population by 20,000. California expects to save about $1.1 billion by the realignment's completion, which officials recently admitted will extend beyond the court-mandated June 2013 deadline.

Yet the shift is putting new burdens on counties, many of which don't have the money or jail beds to cope with the influx. They are being forced to release some inmates early.

Los Angeles County, which runs the largest local jail system in the country, with 17,200 inmates, is expected to receive another 8,300 prisoners under realignment. Despite reducing sentences and allowing some inmates to serve their time in the community, the county's jail population has gone up by 2,000 since October.

Still, the man in charge at the local level, Los Angeles County Sheriff Lee Baca, insists the system will be able to handle the additional prisoners.

"What makes the difference is if you have education programs like we're doing in the Los Angeles County jail system," he says, referring to drug treatment and other programs. "If you have to resort to early release, at least they're better off than when they came in."

* * *

John Cadogan typifies those who will help determine the success of California's plan. A burly former tradesman with a sleeve of tattoos, Mr. Cadogan sits in a conference room at the men's state prison at Chino, one hour east of Los Angeles. He faces a quandary.

He is within weeks of being released from the minimum-security wing of the prison, where he has been serving time on drug charges. In a counseling session, he asks his therapy group what to do about his ex-girlfriend. She wants to get together with him when he gets out, but she's using meth, Cadogan says, which is his former drug of choice. Should he do it?

Cadogan says he'd like to see her briefly and then concentrate on his drug-treatment program. "I'm going to come back clean, I guarantee you that," he says, stroking his mutton chops.

The 14 inmates in the room – a rare assemblage of African-Americans, Hispanics, and whites in a prison where people of different races won't even mingle to play softball – are skeptical.

"What if she don't agree with what you're talking about and she starts some [stuff] with you and the police come?" one prisoner asks. Other inmates nod.

Cadogan says she wouldn't do that: She's the mother of his daughter. Members of the group press him. How can you be sure? One man in prison blues leans forward and intones in Cadogan's ear: "It's like playing Russian roulette with a loaded gun."

Discussion leader Mona Velas­quez, a counselor with the Amity Foundation, a rehabilitation group, reinforces the dangers. Cadogan has a common problem, says Ms. Velasquez. "What do you do when you run into that old friend that's using?" She runs through a list of "social skills" outlined on a white board. The last point: "Make a plan."

Cadogan will, in fact, have to defy some hard arithmetic. A recent study by the California Department of Corrections and Rehabilitation (CDCR) found that about two-thirds of former inmates return to prison within three years. This doesn't mean they all commit serious crimes. The biggest group of them – 45 percent – return because of simple parole violations.

Social workers who deal with inmates believe drug treatment, counseling, and other programs like the one at Chino greatly improve the chances of prisoners becoming productive members of society. They see such programs as better than keeping offenders locked up, or locking up low-risk prisoners to begin with, which can just harden inmates.

Yet many of the social service groups will now be doing their work with less money, even though the number of prisoners they'll be dealing with will likely rise substantially. When the latest funding cuts came down from Sacramento, Amity had to reduce its staff at Chino from 14 to 10. That means the counseling program there will have room for 130 inmates this year instead of 150, though the group expects the funding to be restored eventually.

The realignment process will also be watched closely by critics. Many worry that too many pris-oners are being released before they should be. Steve Cooley, the Los Angeles County district attorney, says flatly that realignment will be a "public safety disaster."

He cites the case of John Folinsky, a Los Angeles drug dealer. Mr. Folinsky pleaded no contest last November to a cocaine possession charge. He was already out on parole for committing the same offense two years earlier. He was sentenced to six years in the county jail, but wound up serving less than a month and was released with electronic monitoring.

The crime rate, says Mr. Cooley, is at a 60-year low "because we've done a good job of incarcerating those who commit crimes. Some of us believe incarceration for serious criminals is important. It's how you protect the public."

In the politicized world of criminal justice, one misstep can cause big repercussions. Illinois released a large number of pris-oners early a few years ago, some of whom ended up committing serious crimes. Facing an uproar, Gov. Pat Quinn (D) in 2009 reversed a policy of allowing inmates early release for good behavior.

While California's decision to open some of its prison doors has been forced on it to a certain extent by costs and the courts, the administration of Gov. Jerry Brown (D) will likely be judged uncompromisingly by its success or failure. Governor Brown himself seems confident with the realignment.

"We're not going to have a revolving door in the prison," he said recently outside an interfaith prayer breakfast in Los Angeles. "We're going to strengthen local law enforcement."

Others are less optimistic. "We always see a real serious crime committed [by someone who gets out early] and then everything gets repealed and we go back to being tough on criminals again," says Christine Ward, executive director of Crime Victims Action Alliance, a victims' rights group. "Unfortunately, that case is coming."

* * *

Mark Faucette is one who will be trying to prevent "that case" from happening. With his trimmed beard, crisp suit, and combed-back hair, Mr. Faucette looks as if he could be a Hollywood agent. He is a vice president of the Amity Foundation, the group that runs the treatment program at Chino and operates a residential facility in Los Angeles for released cons.

After 25 years of working in prison systems in Arizona and California, Faucette combines a policy wonk's understanding of criminal justice issues with prison-yard savvy. He's as comfortable in front of a microphone as he is around people with serious rap sheets.

On this day, he walks over on his lunch hour to Amity's 150-bed residential facility to check on new arrivals. He stops Alfred Medina Jr., whose face is covered in a pastiche of tattoos, on his way into the building. The two sit down in a living room with a large fish tank, where they talk about Mr. Medina's experience at Amity.

Medina recalls the day in late November when L.A. sheriff's deputies dropped him off in chains, after he had been picked up for not reporting in with his parole officer. They gave him the option of doing a stint at Amity instead of going back to prison. Before Oct. 1, 2011, when realignment went into effect, he would not have had a choice. "I want to stay out," he says. "I feel comfortable here."

Medina was an active member of the East Side Stoners gang, dealing drugs out of a house in East Los Angeles he shared with his father, who was also a dealer.

Intergenerational gang membership, drug addiction, and violence are all he has known most of his life. One of the tattoos on his face, a constellation of six stars, originally stood for the six rival gang members he says he stabbed in prison. Medina admits that after he was released last time, he went back to taking heroin and speed, this time in the bathroom of a halfway house.

But he's sought to make changes. He has volunteered with a scared-straight program, delivering lectures to teens caught shoplifting. Now, he says, the stars on his face represent his six children. "My heart is softening up; it's not as hard as it used to be," he says.

Faucette and Medina shake hands as they part. "When we opened this place originally, they wouldn't take these guys," says Faucette. The worst of the worst were thought to be beyond help. Residential programs like Amity's try to bring stability to the chaotic lives of these former prisoners. No one here, though, least of all Faucette, dismisses the magnitude of the challenge.

"It's not about just getting somebody back in the job force. They've never had a job before ... it's not about giving them three hots and a cot. It's about how can they live in a place like this," he says, referring to the group home and the community.

Still, Faucette believes the realignment represents a chance for a new approach after decades of lock-'em-up policies. "We already know the formula that keeps people out of jail," he says, citing drug treatment, counseling, and skills training. "This is an opportunity for us to do some things right."

But he is also aware of the number of inmates who are going to have to be dealt with – and what might happen if a lack of funding or failure for some other reason results. "If this doesn't get done right in L.A., it's going to bring down the whole state," he says.

* * *

Allen Thorne represents another dimension of Cali­for­nia's prison experiment and will help determine whether it will work. He is a former inner-city gang member who killed a rival gang member with a shotgun when he was a teenager. A judge sentenced him to 15 years to life, a term he started serving when he turned 20.

While Mr. Thorne isn't the type of "nonserious" offender who would be locked up in a county jail under realignment, he is someone more likely to win eventual freedom in the new climate in California. Already, since Brown became governor, parole boards have become more flexible: The number of lifers granted parole rose from 119 in 2007 to 463 last year, CDCR statistics show.

For Thorne, the time he spent in prison may have been more violent than his time on the streets. Once incarcerated, he says, he quickly became an enforcer for a Mexican gang. "They said at the time I was one of the best for assaults – staff, inmate, it didn't matter," he says.

Thorne wound up in a ward with the most vicious prisoners, segregated from the general population for 10 years. Then, one day, he says, "I just woke up. I think I had just stabbed somebody in our yard." He picked up a legal pad and drew two columns. In one, he totaled the number of assaults his crew had committed; in the other, the assaults inflicted on them. After listing 36 he had carried out alone, he put the pad down. "That was a sign – I'm done," he says.

Thorne started attending self-help groups, learning computer skills, and working as a clerk. At 31, he got the equivalent of a high school degree. Later, the state transferred him to a prison known for offering vocational work.

There, he heard of a program run by Roman Catholic Sisters Mary Sean Hodges and Teresa Groth. In California, parole boards won't release prisoners serving life sentences unless they have an outside address. The nuns offered him housing and the promise of a job.

It took 13 official hearings for Thorne to win parole. On Oct. 17, 2011, he was handed a temporary ID and $200 in an envelope. Several guards shook his hand. He was free after 32 years.

Today he says he's ready to do anything to move forward in life. "I'll mop, sweep, floss – it doesn't matter to me," he says.

* * *

The nuns who helped Thorne get paroled didn't set out with the goal of freeing lifers. But that's where they've ended up. Hodges, a tall, pragmatic woman with mercury-colored hair, began offering housing to ex-inmates – specifically sex offenders – in an old warehouse near downtown Los Angeles in 2006. The place had once been an adult bookstore. Her group home didn't last long.

"The gentlemen's club next door got concerned that with that many sex offenders in the area there would be police around, and they didn't want police around the gentlemen's club," she says, with a laugh.

Hodges was visiting prisons to pray with inmates. She met Ron Anderson, who was serving a life sentence at Avenal, a state prison in central California. He told her his predicament: He couldn't get paroled without housing, but he couldn't get housing without being released. She promised him he'd have a place to live.

Since then Hodges and Groth have argued on behalf of some 2,000 prisoners. While only a fraction have been freed, lifers now get released in higher numbers than at any time in recent history. Hodges credits Brown for trusting the parole boards' judgments. "He's letting out probably 80 percent, whereas before probably 10 percent were released," she says.

The sisters' reentry program, the only one in the state that provides housing and jobs for lifers, receives about five parolees a month. They housed 10 men in March 2010; today they shelter more than 60.

Frustrated with how hard it can be for ex-inmates to find work, Groth one day entered the lifers' skills on a spreadsheet. She noticed a pattern. Almost all had done upholstery work in prison. With the help of David Velasquez, a paroled lifer, the sisters opened a reupholstering shop in 2010. It has since expanded into a cleaning business that prepares homes to go on the real estate market under the name Starfish Services LLC.

On a sun-splashed afternoon, Corralez does some final stitching on a retro-looking brown sofa at the upholstery shop near downtown L.A. He never heard back from Trader Joe's. "It's not stopping me from looking," he says. He's had a couple of phone interviews for other jobs. In the meantime, he's grateful for the upholstery work.

After his release in March 2011, Corralez says his first few months were hard. He wouldn't leave his house alone because he felt, as in prison, he needed permission – permission to go outside, to eat, to exercise. He's making some money now to help support himself and his wife. He's feeling more confident, too.

"I just didn't get out," he says. "I had to achieve this freedom."