"Shocking" sexual violence is being carried out by children against other children as young as 11, according to an official report.
The Office of the Children's Commissioner for England said the perpetrators could be 12 or 13, and rape is seen as "normal and inevitable" in some areas, especially among gangs.
Its report said bullying and sexist attitudes existed across the country.
Council chiefs said work by agencies on child protection needed to improve.
The report is the result of a two-year inquiry by the children's commissioner into child exploitation and gangs.
It is being published alongside research on young people's understanding of consent to sex, and a study on the pressures on young people who have been raised in gang-affected neighbourhoods.
The report says legislation is there to protect children but agencies from the police to social services need to become far better at spotting children at risk and providing them with the necessary protection.
Deputy Children's Commissioner Sue Berelowitz cited the "sheer levels of sadism" uncovered by the inquiry.
In a foreword to the report, Ms Berelowitz said the findings showed the "appalling reality" of sexual violence committed by young people.
"The fact that some adults (usually men) rape and abuse children is generally accepted," she said.
"There is, however, a long way to go before the appalling reality of sexual violence and exploitation committed by children and young people is believed."
"We have found shocking and profoundly distressing evidence of sexual assault, including rape, being carried out by young people against other children and young people."
Ms Berelowitz suggested that the music and pornographic industries have a great deal to answer for in creating such attitudes, with young girls being treated as commodities within gangs, passed around as sexual toys or used to ensnare rival gang members.
She told BBC Breakfast that most of the girls who had been victims of gangland sexual assaults said it was "part of the inevitability of growing up in their area and that there is no point in telling anybody about it".
The inquiry found that 2,409 youngsters were known to be victims of child sexual exploitation by gangs and groups, while a further 16,500 were at risk.
It warned that the problem was prevalent in every area of England, and was not restricted just to low-income, inner-city neighbourhoods but "in every type of neighbourhood, rural, urban, deprived, not deprived".
'Normal and inevitable'
Research conducted by Bedfordshire University into sexual violence in gangs suggested two-thirds of young people questioned (65%) knew of young women who had been pressurised or coerced into sexual activity.
Half gave examples of youngsters offering sex in return for status or protection, and two-fifths (41%) said they knew of individual cases of rape - while more than a third (34%) gave examples of gang rape.
A study by London Metropolitan University suggested that young people had a limited understanding of "consent" and that sex without consent where those involved knew each other was often not seen as rape.
Only one in 12 of those interviewed said that young people would be likely to report crimes of sexual abuse.
It said sexual violence could be seen as "normal and inevitable", with young women "facing the blame" for their own abuse.
"The victim, usually a girl (but boys are victims too) is invariably blamed for their own assault," the study concluded.
"They should not have gone to visit the boy; should not have worn a tight top; should not have had the drink; have 'done it before' so have no right to say no."
The report condemned 94% of safeguarding children boards - which are run by local authorities, police, the NHS, the probation service and other groups - for failing to follow government guidance on tackling child exploitation, and set out recommendations for a new framework.
Councillor David Simmonds, chairman of the Local Government Association's children and young people board, said: "Child sexual exploitation is a horrific crime which can destroy lives. It is a complex issue to tackle and can be hugely difficult to track.
"Councils know that we need to do better but, as this report acknowledges, we cannot do this alone."