Around 541 members of the Taliban, including military commanders, escaped from Kandahar city's main jail via a 320 metre-long tunnel.
A Taliban official on Monday confirmed the overnight escape, boasting that the prison break had been "very well-planned" and that it was five months in the making, Al Jazeera's Qais Azimy, reporting from Kabul, said.
However, police in Kandahar claimed later on Monday that they had recaptured 26 prisoners, and that two of them were killed. They said among those recaptured were eight Taliban commanders.
Toryalai Wesa, the governor of Kandahar, said even though they were caught unawares, the manhunt was continuing.
"Checkpoints are activated, all the units are mobile and they are checking every single person and soon we will start checking some of the housing," he told Al Jazeera.
"There is no change [in the situation] so far ... 24 are back in detention."
According to a Taliban statement, the tunnel was not dug by the inmates but by fighters outside the prison.
"Mujahideen started digging a 320 metre-long to the prison from the south side, which was completed after a five-month period, bypassing check posts and the Kandahar-Herat main highway, leading directly to the political prison," the statement read.
"The tunnel reached its target last night, from where the prisoner Mujahideen were led away through the escape route by three previously informed inmates in a period of four-and-a-half hours, starting from 11pm last night and ending at 3:30am this morning. Mujahideen later on sent vehicles to the inmates who were led away to secure destinations."
"They all have made it safe to our centres and there was no fighting," Yousuf Ahmadi, a Taliban spokesman, said. Ahmadi said that 106 were Taliban commanders while the rest were foot soldiers.
The Taliban said the prison guards did not notice the escape until four hours after the operation was completed.
The prison in southern Afghanistan typically holds drug dealers as well as Taliban fighters captured by NATO forces, our correspondent said. The break constitutes a "big success" for the Taliban and would "have a dramatic effect on the fight against the Taliban in the region", Azimy said.
Afghanistan's country's justice mister said the Taliban used "modern technology" in digging the tunnel, adding that it was probable that prison guards were in involved in the operation.
'Security not weak'
Defending the capability of Kandahar's security forces, Wesa, the provincial governor, told Al Jazeera they are not weak. "The digging of the tunnel was beyond anybody’s expectation," he said. "I'm sure there were some smart people [among them]. This was a smart move.
"We were not able to [imagine] that someone would be able to dig a tunnel from such a long distance. It was not something we were even thinking of."
There have been previous escapes from the same Kandahar prison. In June 2008, Taliban fighters attacked the facility, blasting through its entrance and engaging in a gun battle with police.
Nearly all of the estimated 1,150 prisoners, including some 400 Taliban, escaped, according to Afghan officials.
The prison was also the scene of a mass hunger strike by hundreds of inmates in May 2008 during which 47 inmates sewed their lips shut after complaining they had been tortured and denied fair trials.
Kandahar city and the surrounding province, considered the birthplace of the Taliban, has been the scene of some of the worst fighting in Afghanistan.