Two inmates are missing at Waikeria prison in the King Country.
The Department of Corrections says the men are believed to still be in the prison grounds.
Prison Services general manager Jeanette Burns says they broke out of a unit which will be closed next year.
The department says there is no evidence that the inmates are outside of the perimeter of the prison.
Prison officers are conducting a grid search.
Police in Te Awamutu were told about the incident at about 2.30am.