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Background and aims: Reported associations between previous incarceration and the risk of overdose‐related death are substantially heterogeneous, and previous studies are limited by an inability to control for confounding factors in risk assessment. This study investigated the associations of overdose‐related death with previous incarceration and the number or cumulative duration of previous incarcerations, and individual or neighborhood characteristics that may potentially modify the associations. Design and setting: A cohort study using a 20% random sample of residents in British Columbia, Canada. Participants: A total of 765 690 people aged 23 years or older at baseline as of 1 January 2015. Mean age was 50 years; 49% were males. Measurements Previous incarcerations that occurred during the 5‐year exposure period (January 2010 to December 2014) were identified using provincial incarceration records. Overdose‐related deaths that occurred during the 3‐year follow‐up period (January 2015 to December 2017) were identified using linked administrative health data. Baseline individual and neighborhood characteristics were retrieved from the provincial health insurance data. Findings In the cohort, 5743 people had an incarceration history during the exposure period, and 634 people died from drug overdose during the follow‐up period. The mortality rate was 897 and 22 per 100 000 person‐years for people who did and did not have an incarceration history, respectively. After adjusting for baseline individual and neighborhood characteristics (without any interaction term), people who had an incarceration history were 4.04 times (95% confidence interval 3.23–5.06) more likely to die from drug overdose compared with people without an incarceration history. The association was stronger for females, people without diagnoses of substance use disorder and people without dispensation of opioids for pain or benzodiazepines (P < 0.001 for each interaction term). There was no discernible linear trend between the number or cumulative duration of previous incarcerations and the risk of overdose‐related death. Conclusions: Previous incarceration appears to be a major risk factor for overdose‐related death. [ABSTRACT FROM AUTHOR]