The subtitle of Marching Powder, by Rusty Young and Thomas McFadden, "A true story of friendship, cocaine, and South America's strangest jail," is an accurate description of the book's content. It starts with Rusty Young, a young Australian law graduate, being detained for sneaking micro-cassette tapes out of the San Pedro Prison and later being arrested for bribery. Rusty is recording the story of Thomas McFadden, an Englishman who has been incarcerated for smuggling cocaine. Rusty describes how he learned about Thomas through other backpackers who had been given a tour of the prison by Thomas. He goes there, and discovers that for a fee he can stay overnight in the prison. He and Thomas become friends and Rusty agrees to work on a book about Thomas and the prison. After Rusty is busted for bribery, Thomas gets him out of trouble by helping him to bribe the prison's governor. After this beginning, the rest of the book is told from Thomas's point of view. He describes how he was caught at La Paz Airport with five kilograms of cocaine hidden in suitcases when the military policeman he had bribed, Colonel Lanza, betrays him because of a drug crackdown led by the U.S. government. Thomas spends a horrific 11 days in a temporary prison and then is transferred to San Pedro, which seems more like a small town than a prison. Hundreds of women and children live there, who are the families of the inmates. The prisoners have keys to the doors of their cells, which are done up like small apartments, with televisions and even computers. The richest inmates have the best cells, but the penniless inmates live in terrible conditions in the prison's interior sections. Thomas's money has been confiscated and he learns that he must not only pay the authorities an entry fee to the prison but also must buy his own cell. Luckily, an inmate named Ricardo takes Thomas under his wing until Thomas gets money from outside sources to buy a cell.

After Thomas has settled into prison life, he bribes the guards to have a night on the town, where he meets an Israeli woman named Yasheeda at a nightclub. She stays with him for several nights in the prison, and becomes his girlfriend. Eventually, she leaves him, after which tourists begin visiting who have heard about Thomas from Yasheeda and her friends. He develops a tour business, and then opens a small shop in the prison, and then a restaurant. He also develops a cocaine habit, despite never having used it before his incarceration. Bolivia's best cocaine is made by inmates in laboratories within the prison. Following a dispute over money owed to him by father-and-son inmates named the Velascos, Thomas is framed for trafficking cocaine in the prison. Under an early release law, Ricardo is released, but Thomas is sent to a terrible solitary confinement block for two months before being returned to his own room. He meets Rusty and the two concoct the plan for a book. Thomas bribes the judges, who acquit him of the new charges. Thomas has served four-and-a-half years, which is long enough for the early release law to apply and he is set free.