Children suffering a mental health crisis are forced into police custody because 35% of NHS "places of safety" in England ban under 16s, figures show.
The Care Quality Commission found 56 out of 161 facilities, including hospitals, will not admit people under the age of 16 and half ban under 17s.
The watchdog said it was worried about the "routine" use of police cells in England for troubled children.
Care minister Norman Lamb called the situation "unacceptable".
The CQC said people who suffer a mental health crisis in a public place - and are detained under the Mental Health Act - should be taken to a so-called place of safety to have their needs assessed.
This could be a specialist mental health hospital or an emergency department at a general hospital.
But the watchdog found that in many areas, including Birmingham, Liverpool, Sheffield and Devon, those centres do not accept under 16s, while a further 28 facilities in England do not accept under 18s.
Dr Paul Lelliott, CQC's deputy chief inspector of hospitals, said the situation affecting young people was "worrying".
"They should certainly not be taken to police stations routinely," he added.
Lucie Russell, from charity Young Minds, told the BBC: "What they're going to feel is, 'I'm a prisoner, I've done something terribly wrong.
"'So the fact that I'm distressed and traumatised and confused and frightened must mean that it's my fault because I've been locked up.'
"Being surrounded by four walls in a police cell for anyone is a traumatic experience."
Sophie Corlett, from charity Mind, said it was "shameful" that some counties had capacity for only one person at a time, and the CQC figures should be "a wake-up call".
The Home Office is currently carrying out a consultation on the use of the Mental Health Act by police in England and Wales, and Home Secretary Theresa May has also asked HM Inspectorate of Constabulary to investigate how vulnerable people are treated in custody.
Mr Lamb said it was "unacceptable for a child in a mental health crisis to be taken to a police cell because there is no health-based place of safety".
The minister said it was "imperative" that people under 18 were treated in an environment suitable for their age.
In 2012/13, 580 children were detained by the police under Section 136 of the Mental Health Act, and of those, 45% were taken into police custody.