"Nupur Tawar expressed desire to teach other inmates which we have allowed," Jail Superintendent Viresh Raj Sharma said.
Talwar, who is a dentist, is facing trial in the 2008 double-murder case along with her husband Rajesh.
Sharma said Nupur taught Hindi and English to inmates.
After the courts rejected her bail plea, Nupur had been distraught. Later, she asked for permission to teach fellow inmates to spend her time, jail officials said, adding that she has been praying and doing yoga regularly.
"She has been reading books available in the jail and has also examined children who are staying in prioson with their mothers," they said.
Nupur also expressed desire to develop a park in the jail, they said.
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Sharma said that Nupur is "looking quite normal".
Talwar, who is prime accused in the case, yesterday initiated the process for filing a bail petition in the Allahabad High Court, a day after she was denied relife by Ghaziabad court.
Aarushi and Hemraj were found murdered inside the residence of the Noida-based dentist couple four years ago.
The case was referred to the CBI by the Uttar Pradesh government following an outcry over shoddy investigation by the police.
A special CBI court at Ghaziabad had earlier rejected Talwar's bail plea saying, "The legal history is replete with instances of matricide, patricide and fratricide. Everything is possible in these days of modern era wherein moral values are fast declining and one can stoop to the lowest extent."