Prison Island was an island fortress used by G.U.N. to hold the toughest crooks in the world, with prison cells of underwater detention cells, surrounded by water, and had spy cameras and metal detectors so not even a fly could escape. It hosted the Sonic Adventure 2 levels Iron Gate, Prison Lane, Metal Harbour and Green Forest.
Dr. Eggman broke into Prison Island using his new Egg Walker to release Shadow the Hedgehog. Sonic was put in prison there, although he was freed by Amy Rose. Eggman returned to the island as well at the same time to retrieve three Chaos Emeralds and Shadow blew up the island. Luckily, Sonic, Amy, Tails, Shadow, Eggman, Rouge and everyone else managed to get off the island before it exploded.
However, Shadow the Hedgehog revealed that the island itself had not been destroyed, only poison being tipped into it's pools and it being deserted. Shadow returned here and so did Charmy to find five top-secret disks.