There was an increase of 20% in six years of those reporting mental health problems as a major or significant problem in their local area, rising from 40% in 2011 to 60% in 2017, findings show.
A survey of more than 1,000 senior clergy, undertaken between September and October last year, also highlighted loneliness and isolation as the main concern - with 76% saying this was a major or significant problem.
Homelessness was also a growing issue, with 23% identifying this as a major or significant problem, up from 14% in 2011, according to the third Church in Action report published on Sunday.
Conducted by the Church of England and the Church Urban Fund, the survey also found one in five churches, or 19%, runs a food bank either alone or in partnership - with 93% supporting one by either providing a venue, volunteers or donations.
Of those quizzed, 70% of churches run three or more community benefiting organised activities such as parent toddler groups, lunch clubs for older people, youth work and night shelters.
Findings also show churches in the most deprived areas are the most active when it comes to activities - with 34% running six or more - such as debt advice and job clubs.
Bishop at Lambeth, Tim Thornton, said the research shows the "deep commitment" of the Church of England to the "well-being and flourishing of communities across the country".
"The Church of England is uniquely well placed with its presence in every community to respond to a range of different needs, increasingly working in partnership with other organisations including local schools, charities, and businesses," he added.
Paul Hackwood, executive director of Church Urban Fund, said the long-term presence of churches in local communities means they are "typically embedded" in and "actively nurturing" networks of relationships.
He said: "This report shows that they are playing a vital and significant part in responding to many of the challenges we face as a society, especially around issues such as loneliness, mental health problems and financial difficulties."
