Mountain prison

The Mountain Prison is a large cave underneath the mountain near the village where Hama lives. Hama discovered this cave years ago. During full moons, she would use Bloodbending on innocent members of the village, forcing them to walk into the cave. Once captured, there was little hope of escape. Before the imprisonment of Hama, the only person known to have escaped her clutches is an elderly man named Ding.

History
While Team Avatar was staying in a cave above Hama's village, Toph heard what she thought was people screaming for help under the mountain. The rest of Team Avatar, however, dismissed the theory as unlikely. Later on, when Katara left with Hama to learn more about Waterbending one night underneath a full moon, the others heard the screaming again. This time, Toph tracked down the source to the Mountain Prison, which was located at the back of a cave. There, the prisoners told them that Hama had imprisoned them; the group realized Katara could be in potential danger, seeing how she was in Hama's company. Toph stayed behind to free the captives while Aang and Sokka went to save Katara.

The prisoners returned the group's favor by arresting Hama. Unfortunately, she had already forced Katara to learn the despicable technique of Bloodbending before the arrest was made.

It is unknown whether Hama discovered the prison as it is today or was the one to convert the cave into a prison.