diff --git a/CHANGELOG.md b/CHANGELOG.md
index f6cabd9..2e5b929 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,13 @@
 # Changelog
 
+## Unreleased
+
+### Fixed
+
+- Captioned figures inside `prf:` directive boxes breaking the LaTeX/PDF build with `LaTeX Error: Not in outer par mode`, fixing [\#169](https://github.com/executablebooks/sphinx-proof/issues/169).
+  - Figures inside every `prf:` box, numbered or `:nonumber:`, are now written as `\begin{figure}[H]` so they stay in place, as Sphinx already does for figures inside its own admonitions
+  - HTML output is unchanged
+
 ## v0.4.0 (2026-01-27)
 
 ### Added
diff --git a/sphinx_proof/nodes.py b/sphinx_proof/nodes.py
index d77b257..756a044 100644
--- a/sphinx_proof/nodes.py
+++ b/sphinx_proof/nodes.py
@@ -26,11 +26,23 @@
 latex_admonition_end = "\\end{sphinxadmonition}" + CR
 
 
+def visit_latex_admonition(self) -> None:
+    self.body.append(latex_admonition_start)
+    # Write figures inside the box as [H] rather than floats, which LaTeX
+    # rejects there, as Sphinx does for its own admonitions
+    self.no_latex_floats += 1
+
+
+def depart_latex_admonition(self) -> None:
+    self.body.append(latex_admonition_end)
+    self.no_latex_floats -= 1
+
+
 def visit_enumerable_node(self, node: Node) -> None:
     if isinstance(self, LaTeXTranslator):
         docname = find_parent(self.builder.env, node, "section")
         self.body.append("\\label{" + f"{docname}:{node.attributes['label']}" + "}")
-        self.body.append(latex_admonition_start)
+        visit_latex_admonition(self)
     else:
         self.body.append(self.starttag(node, "div", CLASS="admonition"))
 
@@ -42,7 +54,7 @@ def depart_enumerable_node(self, node: Node) -> None:
         number = get_node_number(self, node, countertyp)
         idx = list_rindex(self.body, latex_admonition_start) + 2
         self.body.insert(idx, f"{realtyp.title()} {number}")
-        self.body.append(latex_admonition_end)
+        depart_latex_admonition(self)
     else:
         # Find index in list of 'Proof #'
         number = get_node_number(self, node, countertyp)
@@ -55,7 +67,7 @@ def visit_unenumerable_node(self, node: Node) -> None:
     if isinstance(self, LaTeXTranslator):
         docname = find_parent(self.builder.env, node, "section")
         self.body.append("\\label{" + f"{docname}:{node.attributes['label']}" + "}")
-        self.body.append(latex_admonition_start)
+        visit_latex_admonition(self)
     else:
         self.body.append(self.starttag(node, "div", CLASS="admonition"))
 
@@ -66,7 +78,7 @@ def depart_unenumerable_node(self, node: Node) -> None:
     if isinstance(self, LaTeXTranslator):
         idx = list_rindex(self.body, latex_admonition_start) + 2
         self.body.insert(idx, f"{realtyp.title()}")
-        self.body.append(latex_admonition_end)
+        depart_latex_admonition(self)
     else:
         # use the id to find the correct title location
         search_str = f'<p class="admonition-title" id="{id}">'
diff --git a/tests/books/test-latexfigure/conf.py b/tests/books/test-latexfigure/conf.py
new file mode 100644
index 0000000..d73e591
--- /dev/null
+++ b/tests/books/test-latexfigure/conf.py
@@ -0,0 +1,10 @@
+# Test root for captioned figures inside prf directive boxes in LaTeX output
+# (https://github.com/executablebooks/sphinx-proof/issues/169). The boxes are
+# in a chapter, figures.rst, as in a book: boxes in the root document itself
+# lose their numbers in LaTeX output.
+
+project = "sphinx-proof Test"
+copyright = "2020, QuantEcon Developers"
+author = "QuantEcon Developers"
+
+extensions = ["sphinx_proof"]
diff --git a/tests/books/test-latexfigure/figures.rst b/tests/books/test-latexfigure/figures.rst
new file mode 100644
index 0000000..489bc2b
--- /dev/null
+++ b/tests/books/test-latexfigure/figures.rst
@@ -0,0 +1,67 @@
+Figures
+=======
+
+.. prf:theorem:: A numbered theorem
+   :label: thm-numbered
+
+   .. figure:: plot.png
+      :name: fig-numbered-theorem
+
+      Figure in a numbered theorem
+
+.. prf:lemma:: An unnumbered lemma
+   :label: lem-nonumber
+   :nonumber:
+
+   .. figure:: plot.png
+      :name: fig-unnumbered-lemma
+
+      Figure in an unnumbered lemma
+
+.. prf:proof::
+
+   A proof with a figure.
+
+   .. figure:: plot.png
+      :name: fig-proof
+
+      Figure in a proof
+
+.. note::
+
+   .. figure:: plot.png
+      :name: fig-note
+
+      Figure in a note
+
+.. prf:theorem:: A theorem with a nested lemma
+   :label: thm-nested
+
+   .. prf:lemma:: A lemma inside a theorem
+      :label: lem-nested
+      :nonumber:
+
+      .. figure:: plot.png
+         :name: fig-nested-lemma
+
+         Figure in a lemma inside a theorem
+
+   .. figure:: plot.png
+      :name: fig-after-nested-lemma
+
+      Figure in a theorem after its nested lemma
+
+.. note::
+
+   .. prf:definition:: A definition inside a note
+      :label: def-in-note
+
+      .. figure:: plot.png
+         :name: fig-definition-in-note
+
+         Figure in a definition inside a note
+
+.. figure:: plot.png
+   :name: fig-outside
+
+   Figure outside any box
diff --git a/tests/books/test-latexfigure/index.rst b/tests/books/test-latexfigure/index.rst
new file mode 100644
index 0000000..cd2016f
--- /dev/null
+++ b/tests/books/test-latexfigure/index.rst
@@ -0,0 +1,6 @@
+Figures in proof boxes
+======================
+
+.. toctree::
+
+   figures
diff --git a/tests/books/test-latexfigure/plot.png b/tests/books/test-latexfigure/plot.png
new file mode 100644
index 0000000..6904e5e
Binary files /dev/null and b/tests/books/test-latexfigure/plot.png differ
diff --git a/tests/test_latex.py b/tests/test_latex.py
index 1820cb2..cabc1f2 100644
--- a/tests/test_latex.py
+++ b/tests/test_latex.py
@@ -1,3 +1,5 @@
+import re
+
 from TexSoup import TexSoup
 import pytest
 
@@ -12,3 +14,51 @@ def test_latex_build(app, file_regression):
     # get content markup
     file_content = TexSoup(path_algo_directive.read_text(encoding="utf8"))
     file_regression.check(str(file_content.document), extension=".tex", encoding="utf8")
+
+
+LATEX_FIGURE = re.compile(
+    r"\\begin\{figure\}\[(?P<align>[^\]]*)\](?P<body>.*?)\\end\{figure\}", re.DOTALL
+)
+# A figure's :name: becomes \label{\detokenize{<docname>:<name>}}
+LATEX_FIGURE_NAME = re.compile(r"\\label\{\\detokenize\{[^:}]*:(?P<name>[^}]+)\}\}")
+
+
+def latex_figures(tex):
+    """Map each figure's name to (figure placement, sphinxadmonition depth).
+
+    A figure without a name is collected under None.
+    """
+    figures = {}
+    for figure in LATEX_FIGURE.finditer(tex):
+        before = tex[: figure.start()]
+        depth = before.count(r"\begin{sphinxadmonition}") - before.count(
+            r"\end{sphinxadmonition}"
+        )
+        name = LATEX_FIGURE_NAME.search(figure["body"])
+        figures[name["name"] if name else None] = (figure["align"], depth)
+    return figures
+
+
+@pytest.mark.sphinx("latex", testroot="latexfigure")
+def test_latex_figure_in_admonition(app):
+    """Figures inside prf directive boxes must not float (#169).
+
+    A floating figure environment inside the sphinxadmonition box stops
+    LaTeX with "Not in outer par mode".
+    """
+    app.build()
+    tex = (app.outdir / "sphinx-prooftest.tex").read_text(encoding="utf8")
+
+    assert latex_figures(tex) == {
+        "fig-numbered-theorem": ("H", 1),
+        "fig-unnumbered-lemma": ("H", 1),
+        # prf:proof and note boxes come from Sphinx's own admonition visitors
+        "fig-proof": ("H", 1),
+        "fig-note": ("H", 1),
+        # Figures after a nested box closes are still inside the outer box
+        "fig-nested-lemma": ("H", 2),
+        "fig-after-nested-lemma": ("H", 1),
+        "fig-definition-in-note": ("H", 2),
+        # Figures after the boxes float again, so the counter was restored
+        "fig-outside": ("htbp", 0),
+    }