A quarter of gay people surveyed in a major EU poll say they have been subjected to attacks or violent threats in the past five years.
Poorer and younger respondents were more likely to face discrimination due to their sexuality, the survey found.
Some 93,000 people in the EU and Croatia were polled in the EU's first survey on this scale.
Gay rights campaigners welcomed the report but called for stronger legal action by Brussels to tackle the issue.
Ilga-Europe, a non-governmental organisation which surveys attitudes to gay issues, told the BBC it regretted that a comprehensive EU Anti-Discrimination Directive drafted by the European Commission in 2008 had yet to be approved by EU leaders.
Ilga's own annual report published on Thursday found "little legislative progress towards protecting LGBTI [Lesbian, Gay, Bisexual, Transgender/Transexual and Intersexed people] from discrimination in accessing goods and services".
In a survey ranging across both the EU and the rest on Europe, the NGO noted the hostility gay people encountered in former Soviet states like Russia and Georgia when they tried to demonstrate publicly.
On Friday, about 10,000 anti-gay protesters in the Georgian capital Tbilisi stormed police barricades, beating and chasing a couple of dozen gay activists who had tried to mark the international day against homophobia.
The report by the EU's Fundamental Rights Agency (FRA) was launched at a conference in The Hague attended by some 300 politicians and experts.
Respondents were asked in the survey whether they had experienced discrimination, violence, verbal abuse or hate speech on the grounds of their sexual orientation or gender identity.
The survey found
- East European states recorded the highest levels of homophobic behaviour
- Some 26% of respondents (and 35% of transgender respondents) said they had been attacked or threatened with violence in the past five years
- Most of the hate attacks reported took place in public and were perpetrated by more than one person, with the attackers predominantly being male
- More than half of those who said they had been attacked did not report the incident to the authorities, believing no action would be taken
- Half of respondents said they had felt personally discriminated against in the year before the survey, although 90% did not report the discrimination
- Some 20% of gay or bisexual respondents and 29% of transgender respondents said they had suffered discrimination at work or when looking for a job
- Two-thirds of respondents said they had tried to hide or disguise their sexuality at school
Ioannis Dimitrakopoulos, head of the FRA's equality and citizens' rights department, told the BBC News website it was unclear whether the reported level of homophobic crime had increased because of a past lack of data.
The survey was commissioned in 2007, the same year the FRA was created, after the EU gained new powers to tackle discrimination, he said.
Despite the findings of the survey, Mr Dimitrakopoulos said there appeared to be a "pattern across Europe whereby things seem to be improving for the younger generation".
"From circumstantial evidence, it is possible to say that the situation has improved, both in legal terms and in people's perceptions," he argued.
Ilga's communications manager, Juris Lavrikovs, said that while the EU report was welcome, it was regrettable that the EU's 2000 directive on equal treatment in employment had not been extended to cover access to goods and services.
The EU had made "tremendous progress" legislatively and in terms of promoting awareness of gay rights, he told the BBC, but the economic crisis had increased radicalisation, complicating the lives of gay people.
"Look how easily political opinion is being manipulated in Europe, how certain rhetoric can provoke violence, and it is very easy for people to go back into the closet," he said.
"Look at France, which used to be considered a very liberal, very open country. Now it is scary for a gay couple to walk hand in hand in Paris because of the increase in violence."
The EU survey suggests Lithuania has one of the worst records for homophobic behaviour. Tomas Vytautas Raskevicius, project assistant at the Lithuanian Gay League, told the BBC: "Lithuania has one of the highest suicide rates in Europe.
"We have this real feeling that a lot of suicides are connected to homophobic bullying. The authorities don't talk about it out loud, and the daily harassment and remarks in the streets and public places is very widespread."
One gay man from the Netherlands, John van Breugel, told the BBC he was shocked by the scale of the problem.
He himself, he said, had been subjected to homophobic abuse only twice in his life.
"First when I was in Germany with my boyfriend and a couple came up and called us 'dirty gays'," he said. On the second occasion, he was in London when someone spat in his face as he went to the shops.
He said the EU should do everything it could to tackle hate crime against gay people, including sanctions on countries that allowed homophobic attacks to happen.