The investigation, which lasted almost two years, shows 41% of the world's countries are places where religious freedom is 'impaired'.
The United Kingdom was outlined as 'showing concern' and the report says religious freedom had deteriorated over the past 18 months.
Christianity remains the most persecuted religion and in 14 countries that is linked to extremist Islam.
The Religious Freedom in the World report found some degree of religious persecution in every continent and major region of the world.
However, the highest level of religious persecution was found in North Africa, the Middle East, and much of Asia.
Top 5 countries with religious oppression
- Iraq
- Libya
- Nigeria
- Pakistan
- Sudan
The report was launched at the Houses of Parliament in London at an event attended by leaders of all faiths including the Pope's representative in Britain.
A video message from the Prince of Wales was played, he said: "The horrendous and heart-breaking events in Iraq and Syria have brought the subject of religious freedom and persecution to the forefront of the world's news."
The prince also called for faith leaders to do more to stop persecution and he said "we have yet to see the full potential of faith communities working together".
Only six of the world's countries (Taiwan, Zimbabwe, United Arab Emirates, Qatar, Cuba and Iran) had shown an improvement in religious freedom but all except Taiwan still had problems.
Twenty countries in the world have a 'high' degree of religious oppression.
The report's Editor in Chief John Pontifix told Premier: "There are two things that stand out.
"The first is that faith communities of all types need to stand together to speak out against those committing violence in the name of religion.
"We need to find a sense in which there is complete isolation of those who commit violence in the name of religion.
"The second thing is the government needs to take this more seriously.
"It needs to ask questions about [foreign] governments.
"Are you protecting religious freedom? What are you doing to stamp out violence? What are you doing to protect religious minority groups?"
"If necessary, if we see no signs of change, we should refuse to have economic business with these countries in order to make those governments realise that we cannot go on like this."
