Amnesty International and Human Rights Watch representatives claim attacks on refuges on Nauru are happening "daily".
The group of researchers travelled to the nation last month to investigate Australia's offshore immigration system.
They interviewed 84 refugees and asylum seekers from Iran, Iraq, Pakistan, Somalia, Bangladesh, Kuwait, and Afghanistan over 12 days.
"The conditions that existed on Nauru Island were really frightening and we were living in a camp with really inhumane conditions. They were akin to conditions you would keep an animal in," a detainee told researchers.
"It really was very far from humane. Around 24 people were living in a large tent of about 120 metres."
Researchers documented abuses against detainees and widespread trauma.
"Australia’s policy of exiling asylum seekers who arrive by boat is cruel in the extreme," Anna Neistat, senior director for research at Amnesty International says.
Amnesty International and Human Rights Watch said refugees and asylum seekers, most of whom have been held there for three years, routinely face neglect by health workers and other service providers, as well as frequent unpunished assaults by local Nauruans.
Refugees and asylum seekers are frequently attacked by local people. © 2016 Anna Neistat/Amnesty International
It said many have mental health problems and suffer overwhelming despair.
"Australia’s atrocious treatment of the refugees on Nauru over the past three years has taken an enormous toll on their well-being," said Michael Bochenek, senior counsel on children’s rights at Human Rights Watch.
"Driving adult and even child refugees to the breaking point with sustained abuse appears to be one of Australia’s aims on Nauru."
Over 400 asylum seekers and refugees remain in cramped tents in Australia’s Refugee Processing Center on Nauru. Temperatures in the tents regularly reach 45 to 50 degrees Celsius (113 to 122 degrees Fahrenheit). © 2016 Private
About one-third of the 1,200 refugees and asylum seekers on Nauru remain in the tents, people interviewed said.
Those in tents are subject to curfews, can’t bring smartphones in to the centre and are monitored by guards.
Researchers also found the standard of medical care is poor and specialist medical attention is not regularly available.
Children also said they were regularly subject to abuse at school. Many have stopped attending.
"We are watching our children melt away mentally and emotionally," a detainee told researchers.
Amnesty International and Human Rights Watch said the Australian government’s failure to address serious abuses appears to be "a deliberate policy to deter further asylum seekers from arriving in the country."
It’s calling for the Australian government to immediately resettle the refugees in Australia and close the Nauru offshore processing centre.