In a video message posted Monday on the Justice Department's website, Holder said halfway houses will have to provide standardized treatment for inmates with mental health and substance problems.
They'll also be required to permit cell phone use among inmates, provide transportation so felons can pursue job opportunities and expand access to electronic monitoring equipment.
The changes are intended to cut recidivism rates and help inmates transition back into society.
There are more than 200 halfway houses in the federal system. More than 30,000 federal inmates passed through a halfway house last year.
Most federal offenders spend the last months of their term in a halfway house or under home confinement.
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.