The incident happened early Friday at Palmasola prison in Santa Cruz as the result of battle between two prison groups, CNN reported.
One group allegedly attacked the other with weapons and set two liquid gas cylinders on fire, sparking an explosion.
A child was among those killed in the incident. In Bolivia, children are allowed to live with incarcerated parents.
Bolivian President Evo Morales expressed sympathy and solidarity with victims and their families.
Morales called for an investigation into the incident, which has been described as the deadliest prison violence in Bolivia.
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