- "Welcome to the Sunshine Institute. It's a reformatory for people The Admin has found... difficult. I'll be your Warden."
- —The Warden introducing the Sunshine Institute to Jesse. src
The Sunshine Institute is a massive prison reformatory buried at the bottom of the world, also known as the bedrock layer.
The Sunshine Institute consists of "lounges", or cells, that hold "Guests". Among the cells is the Mush Room, where inmates gather mushrooms and make mushroom stew. The Warden's office is located above the Mush Room. There is also the Zombie Mines, located a level below, where inmates have to fight Zombies and harvest rotten flesh. Cellblock X, where Xara is held, is located at the deepest level of the prison. The Sunshine Institute is surrounded by a massive obsidian maze called the Burrows, which is inhabited by various Hostile Mobs. At a corner of the maze is a tower that leads to the Underneath.
- In "Jailhouse Block", Jesse gets teleported to the Sunshine Institute by Romeo, Jesse later finds Jack/Petra and tried to escape but got caught by one of the Prison Golems. Jesse and the gang later escaped again with the help of Xara and later succeed, leading them to the Underneath.
- In "Below the Bedrock", the Sunshine Institute can be seen during the epilogue of the previous episode.
- In "Above and Beyond", the Sunshine Institute was shown again during the epilogue. It later appears once more in the Episode when Jesse fights Romeo's Petra/Jack Admin form (Depends on the one you choose to get the clock in "Giant Consequences")
- The Warden (Formerly)
- Large Henry
- Big Hank
- Xara (formerly)
- Prison Zombies
- Prison Slimes
- Giant Ghast
- Prison Spiders
- Other Prison Golems
- The institute is the third prison shown in the game, with the first two being the prison in Sky City and Hadrian's obsidian prisons in his office that he used to imprison Axel, Olivia, and Reuben (Human).
- Coincidentally, all three prisons are either located in/near the office of someone important or includes someone's office. The Sky City prison is located near the Sky City Palace, where Isa resides. Hadrian's obsidian prisons are located in his office. The Warden's office is located in the Sunshine Institute.
- It was revealed that the Sunshine Institute is embedded in the bedrock at the bottom of Jesse's world. 
- In "Above and Beyond", Cellblock X can be seen in the Terminal Space.