The number of recorded hate crimes in Wales has more than doubled in five years, according to figures revealed to the BBC.
In the same period the number of people being convicted of hate crimes has risen 9.3%.
In 2009-10 alone, 1,140 crimes were recorded in which the offence was motivated by prejudice.
Equality campaigners welcomed the increase but said around 90% of victims do not report the crimes to police.
BBC Wales publishes its figures on the same day that the Crown Prosecution Service nationally reveals conviction rates for hate crime in 2009-10.
In the four years ending March 2010, more than 53,600 defendants in the UK were prosecuted for hate crimes.
The conviction rate rose from 77% in 2006-07 to 82% in 2009-10. This compares with 73.3% and 82.6% in Wales in the same years.
Judith Edwards the equality and diversity officer for CPS Wales, said the service was encouraged by the fact that the number of cases being prosecuted in Wales has risen 26% in five years.
But she said more needed to be done to improve confidence among the vulnerable who are often targeted because they are a minority.
She said: "The figures have increased not because more crimes are being committed but because more people are reporting them and we are getting better at recording the data.
"We now have hate crime specialist prosecutors in each of the four CPS areas in Wales as well as hate crime coordinators and there are a raft of measures in place to improve reporting.
"Among these is an extensive programme of community engagement, hate crime scrutiny panels where community members give their input and views on hate crime cases and special measures for victims and witnesses, such as reporting restrictions or screens if they are worried about testifying."
The Equality and Human Rights Commission (EHRC) wants more people in Wales to tell police about their experiences of such crime.
Wales director Kate Bennett said: "We have seen figures from the police in Wales which suggest that in the last couple of months the reporting of hate crime has shot up.
"What we want to see is that incidents are identified before they start building up.
"The police are keen to get reporting levels up and early intervention is important. Investigating a small incident and nipping it in the bud is far preferable to waiting for the crime to escalate."
BBC Wales used the Freedom of Information Act to find out how many hate crimes are being reported each year and of those how many are making it to court.
The four forces came back to us with incidents where prejudice had been a factor in crimes like assault and harassment, as well as instances where it was the sole offence.
Several of the crimes had various elements of prejudice, meaning they were classed as several different types of hate crime at once.
Overwhelmingly racially motivated crimes made up the majority of the total (3,598 out of a five-year total of 4,034.)
This is because there was a change in the way racially-motivated crime was recorded following the Macpherson report into the murder of black teenager Stephen Lawrence in 1999.
The other crimes revealed to us were classified as sexual orientation (554) ; religion/faith (58); disability (66) and transgender (30).
Mark Williams of community safety group Safer Wales welcomed the increase in reported crimes but said they were not a "true reflection" of the situation.
He said: "This is supported by research work from Stonewall and Race Equality First who both evidence that only 1 in 4 hate related incidents are reported to the police.
"We are aware of a wide variety of reasons why people do not report to the police including that they do not consider what has happened to them to be a hate crime; that they don't think it's worth reporting to the police (as it happens so regularly) and they are concerned how they will be treated by the police."
Mr Williams is currently holding anti-hate crime training sessions in schools to educate youngsters on the need for tolerance when encountering difference.
Next week BBC Wales focuses on the victims of hate crimes in Wales and what can be done to encourage them to report the abuse.