National Offender Management Service annual reports failed to record that two prisoners, not one, were living in crowded conditions when they were in a cell designed for one person.
Prisons minister Andrew Selous said the situation was "unacceptable".
Campaigners said it was important to know the true scale of overcrowding.
Mr Selous said in a written ministerial statement that prisons had been recording data incorrectly since 2008-9.
He said: "The public should rightly expect this information to be accurate. Publication of clear, reliable figures on how many prisoners we hold in crowded conditions is an important part of making sure we can be held to account.
"It is therefore unacceptable that these incorrect figures have been published over the last six years and that these errors were not identified sooner. Since discovering these errors, we have taken urgent steps to ensure that figures will in future be subjected to rigorous quality control."
The Howard League for Penal Reform said the statement came two years after it published research showing that about 20,000 prisoners were being kept in overcrowded conditions.
Chairman Frances Crook said: "This is a timely written statement, and we welcome the new culture of honesty and accountability at the Ministry of Justice.
"Simple logic dictates that if two or three prisoners are sharing a cell designed for one, then all those people are being held in overcrowded conditions. We are pleased that the government's figures will now reflect this, as the Howard League has made this point repeatedly for many years.
"Holding men in overcrowded cells with nothing to do all day is never going to help them become law-abiding citizens on release, and it is important that the true scale of overcrowding will be made known. Only by knowing what the problem is can we work together to find a solution."
Prison overcrowding has been underestimated for the past six years in England and Wales, the Ministry of Justice has admitted.