It found two in five secondary schools and more than a quarter of primaries were either ethnically segregated or potentially contributing to segregation.
Responding the report - compiled by the national integration charity The Challenge, research body the iCoCo Foundation, and the data analyst website SchoolDash - the Accord Coalition for inclusive education called for urgent action.
Look at our interactive map @SchoolDash - 4 in 10 secondary schools are segregated by ethnicity #equalnotdivided pic.twitter.com/NmFvXpnTph
— The Challenge (@TheChallenge_UK) March 23, 2017
Chair, Rabbi Dr Jonathan Romain MBE, said: "Society needs to urgently challenge the prevailing culture that says it is "okay" for state funded schools to be seen as belonging to and serving certain groups.
"Achieving this must include changing how faith schools currently select their pupils.
"This is because faith schools comprise a third of state funded schools in England and as religious selection of children has - yet again - been found to be ethnically and socio-economically divisive.
"Otherwise, we risk only compounding disadvantage and leaving a legacy of fragmentation and division for future generations.
The 'Understanding School Segregation in England: 2011 to 2016' document urges the Government to set a "clear direction" concerning a reduction in segregation across faith schools.
Join our campaign #EqualNotDivided Schools are our best chance for integration; they are bridges between communities https://t.co/lsekpdr4Yg
— The Challenge (@TheChallenge_UK) March 23, 2017
The report found 29.6 per cent of primary schools and 27.6 per cent of secondary schools were segregated by socio-economic status - based on the proportion of children eligible for free school meals.
It also concluded 28.8 per cent of faith schools are ethnically segregated, compared to 24.5 per cent of those with no faith affiliation.
Faith schools were also found to be less likely to have a higher proportion of disadvantaged pupils.
It also said: "Local Government, faith authorities, academy chains, and individual schools should review practice, not only in relation to individual schools but also to consider the impact upon neighbouring schools.
"School Governors should publish a clear commitment to this end and be required to publish details of their intake, comparing trends over time and taking responsibility for them."