Some young people receiving mental health care in hospital are being moved to settings like bed and breakfast hostels and caravans on holiday sites when they turn 18, an investigation has found.
Others admitted to hiding how unwell they were as they would rather "get out than go to an adult ward".
The probe by the Health Services Safety Investigations Body (HSSIB) found young people are being transferred from children to adult services when they reach "transition age", and not because their care needs have changed.
This is causing anxiety for patients, their families and carers, the HSSIB said, especially those working towards recovery and are "presented with an imminent move to a new provider and the unknowns that would entail".
Experts also warned youngsters are facing a "cliff edge of support" as they near adulthood.
The HSSIB investigation heard of patients being moved to a new hospital on their 18th birthday, with others hiding how unwell they were to avoid being moved onto an adult ward.
The views of staff over age-based transitions were also sought as part of the report, with some describing discharge on a patient's 18th birthday as "inappropriate".
However, a number of care providers told the HSSIB that children's and young peoples services are "stretched" with patients required to transition to adult services at 18 to prevent bed blocking.
Craig Hadley, senior safety investigator at the HSSIB, said: "The report acknowledges that the delivery of mental health care is complex and services are routinely experiencing high demand."
"However, an inconsistent approach to transitions, compounded by a lack of integration between health, social care and education puts the safety and wellbeing of vulnerable young people at risk."
Dr Sarah Hughes, chief executive of mental health charity Mind, said: "Mental health problems do not disappear on your 18th birthday, but too often the support does.
"Young people, who are so unwell they are spending years of their lives in mental health hospitals and require round the clock care, face a cliff edge of support between children and adult services.
"Discharging a vulnerable 18-year-old who may lack the life skills needed to live independently, to a holiday caravan or bed and breakfast hostel, or even making them homeless, when only a day before they were eligible to receive 24/7 care, is unforgivable."
Mr Hadley said a more flexible approach would be safer and more therapeutic for young patients and while some organisations are taking this approach, "they are not underpinned by a system that supports this".
"The move from inpatient children and young people's services to adult services currently happens at an already challenging time of life for young people and it should not be made harder for them, and their families," he added.
"The reality is, the person did not change, their needs did not change, their risks did not change the health, care and education system changed around them because they were a day older."
Dr Hughes added: "This report comes at a time when mental health funding is under severe threat."
"Removing the Mental Health Investment Standard, which protects mental health funding, when inpatient care is already broken and leaving young people in retraumatised states, would be catastrophic.
"It's horrifying that the Government is considering a scenario where things are made even worse. Instead, it must commit to a comprehensive offer for young people up to 25 in its new [NHS](https://www.mylondon.news/all-about/nhs) 10-year-plan, with the necessary funding to deliver it.
"We must also raise the standard of mental health hospitals and reform the Mental Health Act to make inpatient facilities truly therapeutic spaces."
A Department of Health and Social Care spokesperson said: "Patient safety is paramount, and anyone receiving treatment in an inpatient mental health facility deserves safe, high-quality care, and to be treated with dignity and respect. We are grateful to HSSIB for this report, which highlights important concerns that can help us to improve inpatient mental health services.
"This Government will reform the Mental Health Act, to ensure that people with the most severe mental health conditions receive better, more personalised treatment that is appropriate, proportionate, and compassionate to their needs.
"We will work also with the NHS to transform care and recruit 8,500 more mental health workers across children and adult services to reduce delays and provide faster treatment."