Chief Alberto Aracena said at least seven of the injured were in critical condition after the melee in Palmasola prison outside Santa Cruz. He said many of bodies were burned and expected the death toll to rise.
"There was a fight for control in the prison in two cellblocks," he told reporters.
Prosecutors have entered the prison to count the victims as ambulances evacuate the wounded.
As in many Latin American prisons, inmates largely control the inside of Palmasola.