Teenagers held in a youth prison felt "obliged" to fight fellow inmates from rival gangs, inspectors found.
Boys lived in a culture of following "the rules of the game" at Cookham Wood Young Offenders Institution (YOI), the HM Inspectors of Prisons (HMIP) found.
It raised fears over racist graffiti, images of knives and gang signs.
The prisons service said many of the the boys aged between 15 and 18 at the Kent YOI had committed serious crimes and had complex needs.
Inspectors reported: "Children we spoke to described the 'rules of the game' in relation to fighting.
"A culture had been established whereby there was an obligation on children to fight with children from a different postcode, gang or wing."
When boys were moved to an "enhanced" wing they were "allowed to socialise with the former enemy" in order to protect their enhancements and privileges, the report said.
Inspectors said all forms of violence except fights at the Rochester YOI had increased since the previous inspection but highlighted the number of complicated protocols in place to prevent fights or attacks.
HMIP rated Cookham Wood, which holds up to 178 inmates, as insufficiently good in safety, purposeful activity and resettlement, but reasonably good in care following the inspection in December.
Peter Clarke. Chief Inspector of Prisons, said: "Overall, we believed Cookham Wood to be an institution that was progressing but not yet to the point where this could be recognised in our healthy prison assessments."
Dr Jo Farrar, chief executive of Her Majesty's Prison and Probation Service, said: "Cookham Wood holds boys with complex needs who have been convicted of serious crimes, so I'm pleased that inspectors have recognised that staff are providing good support and care.
"It is not unusual for the institution to deal with gang allegiances brought in from the outside, but the governor and his staff are working hard to manage this."