Oscar and Bosie are sharing a cell. Their painted portraits hang on a wall spotted with graffiti, the tags and love hearts left by the young offenders who languished here before Reading prison, built in 1844, finally closed in 2013. Painter Marlene Dumas amplifies Lord Alfred Douglas’s sly and shifty gaze, as he looks out of the corner of his eye towards an imperious and self-possessed Wilde. There is an enormous tension between the two portraits. This is more than just proximity.

The prison itself, with its echoing walkways and wings, suicide netting on its open stairwells, its rows of closed doors and cells, is also much more than just a setting for the artists and writers banged up in Artangel’s latest project, Inside: Artists and Writers in Reading Prison.

The audience stalks the landings, like screws on a shift. In one cell, the murdered gay Italian film director Pier Paolo Pasolini faces his mother. In another, Jean Genet, ferocious and tender and with his piercing eyes, finds himself reunited with his lovers. Dumas’ thinly painted portraits, all based on photographs, invoke relationships, separations, losses, yearnings and death.

In another wing on a different floor, a section of Genet’s 1950 film Un Chant d’Amour is screened behind a closed cell door, part of photographer Nan Goldin’s contribution to Inside. Peering through the spyhole, I watch a prison guard peeping into another cell, mirroring my own voyeuristic surveillance, as the prisoner caresses himself and dances alone, lost in an unbearable erotic solitude.

The core of Inside, and the silent, dead and squalid heart of Reading Gaol, is the cell where Oscar Wilde lived out the worst two years of his life, between 1895 and 1897. He was condemned to an appalling regime of hard labour, hard fare and a hard bed. At some point modernised with a dinged-up metal desk, sink and toilet, the cell is perhaps less grim than it was in Wilde’s time, when evidence of his dysentery overflowed the small tin vessel he had to use for a toilet and made his warders gag. But there have been many other occupants.

The heavy, low wooden door has been replaced, the window enlarged, dim gas jets replaced with electricity. The visible patch of sky is the same, the thin raking light crosses the same uneven, painted bricks. In this room, Wilde feared for his sanity and, during the second year of his sentence, was given the means to write, and composed De Profundis. On Sundays throughout the exhibition it will be read, each week by a different reader, including playwright Neil Bartlett, actors Maxine Peake and Ben Whishaw, musician Patti Smith and Icelandic artist Ragnar Kjartansson. Each reading will take about five hours.

The original door to Wilde’s cell (now in the collection of the Galleries of Justice Museum in Nottingham), has been incorporated into a sculpture by the French artist Jean-Michel Pancin, mounted at the rear of a low concrete dias that replicates the floor of the cell itself. It now stands in what was, in Wilde’s time, the prison chapel. “The boys who cried themselves to sleep in brutal boarding schools became the men in wigs and gowns who sentenced you to two years hard labour,” writes Deborah Levy, in her imaginary letter to Wilde, one of several Letters of Separation – read by their authors – that you can listen to on headphones.

In another cell, Ai Weiwei writes to his young son, describing his 81-day detention in China in 2011, when between interrogations he was constantly watched by ramrod-straight young soldiers who monitored his every move. He had to ask permission to scratch his head, sip water and go to the lavatory. Just as much prisoners, his guards stood over him as he showered and as he slept.

Most of the cell doors here remain closed. There’s nothing inside, except a toilet blocked with sacking, the sink plugged with a scrap of clear plastic, an accidental simulacrum of water splashing into the bowl. Sometimes, there’s a sign on the door announcing loss of tobacco privileges, toilet roll provided, Rule 43 segregation. These signs of recent occupation – the larkish “Room Service” scribbled by a prisoner beside a cell’s emergency bell – are as redolent as any art.

In one group of cells hang drawings of night skies, starfields and constellations pricking the blackness. These images by Vija Celmins are less about escape than time arrested. Their beautiful solemnity is something other than mental flight. So, too, in another wing, the paintings of the German artist Peter Dreher. Since 1974, Dreher has painted the same ordinary glass filled with water more than 5,000 times. In some cells there is only one, in others a row of them, all much the same, all marginally different. Light at a window, a sliver of colour, a slight tonal shift – you have to search for these infinitesimal variations, these breaths of life. The differences are felt as much as seen. Dreher’s act of creation, returning to the same depleted subject again and again, seems like doing time, completing a sentence in the same repetitive act of looking and recording.

Inside slows you down. A buckled bunk bed is swathed under a gold-plated mosquito net in Steve McQueen’s Weight, as much an apparition of a frowzy and squalidly magnificent bridal bed as a real object. After McQueen’s unforgettable prison scenes in his film Hunger, such a theatrical installation suffers in comparison. But it does stay with you.

Not everything here survives. Doris Salcedo’s big tables, rammed through cell doorways, with patches of real grass growing through their pierced, inverted undersides, don’t work. Richard Hamilton’s study for his dirty-protest painting The Citizen feels like an illustration.

The best works do more than decorate the walls. In one cell, a double portrait of the artist Roni Horn, two near identical head-on photographs, somehow catches time,sheared between one blink of the camera’s shutter and the next. On another wall hang two ribbons of gold leaf in a double Möbius strip. Everything here is marked by a kind of stasis and inexpression, a slowed down mental state.

On a landing sits a stack of Félix González-Torres’ posters, each depicting a bird aloft in an empty sky. Several of his bead curtains hang across open cell doorways, blue and silver, like water and memories of life and light. Elsewhere hang self-portraits by Wolfgang Tillmans, shot in a distorted, damaged mirror the artist came across in the prison, his reflection blistered and fractured, fading into a mucky umber light. He also attempted filming the world beyond the prison, fragmented and unreachable through bars and gratings, a view that never settles or focuses.

At the end of one landing a jacket hangs on a wall. Before it, on the floor, sits a battered treasure chest. Look down and there’s a hole driven through the bottom of the chest and the floor beneath. An escape attempt, maybe. But far below is a truncated human torso in a white dress, human arms with hands in blue rubber gloves. It is like a body at the bottom of a well. The hands hold the dress apart, showing us the bed of a stream, water flowing, pebbles lit by sunlight.

It’s vertiginous and inexplicable. Is the body a corpse? Male or female? Why is there a river flowing through it? How come the sunlight? Go to the coat and you will see a square spyhole cut into it. The view beyond is again of sparkling water, falling through a grotto of mossy stones and twigs. Robert Gober’s Treasure Chest and Waterfall are genuinely uncanny visions. You feel the cool air, the balm of light and nature, an inaccessible world of wonder and awful things.

• Inside: Artists and Writers in Reading Prison is at HM Reading prison, until 30 October.

This article was amended on 9 September 2016 – Steve McQueen’s work Weight was wrongly titled as The Winter.