After an unannounced visit in August, HM Inspectorate of Prisons said staffing at HMP Garth, Leyland, impacted supervision, access to some resources and limited health services.
The Category B training prison holds 780 men in total.
A prison spokesman said it had employed 20 extra officers since the inspection.
Inspectors said although it was a training prison, staff shortages meant most prisoners could only attend education or work for three-and-a-half days a week.
Due to the site running a "restricted regime", morning activity sessions were routinely shortened as staff were unavailable to supervise prisoners.
An internal prison report last month said prisoners believed to have been drunk on home-made alcohol were at the centre of recent disorder at the prison.
Inspector concerns included:
â€¢The number of violent incidents had been rising steadily and there was a sharp increase in the two months before the inspection.
â€¢Drug treatment services were good, but they were undermined by too readily available drugs and alcohol.
â€¢Relationships between staff and prisoners were undermined by a lack of continuity of staff on the wings.
Inspectors found the prison was "generally calm and well ordered" and praised its "very good" mental health services. Public protection arrangements were also described as "sound".
Nick Hardwick, chief inspector of prisons, said: "HMP Garth has an important and difficult role and some of the significant challenges it faced at this inspection were caused by staff shortages outside its direct control.
"For the most part these pressures were well managed.
"Nevertheless, the weaknesses in some critical areas - safety, equalities, activities and offender management - undermined its core function as a training prison for serious offenders."
Michael Spurr, chief executive of the National Offender Management Service, said: "At the time of the inspection, Garth had a number of staff vacancies but it was managing a difficult population really well.
"Since the inspection the prison has received 20 new prison officers with six more due to start shortly. The additional staff will enable the governor to further develop the regime at Garth and address the recommendations in the report."
A Lancashire prison that houses a specialist unit for sex offenders has "chronic" staff shortages, inspectors have warned.