The Peoples' Mujahideen, the armed Iranian opposition group, has strongly denied accusations that it mistreated its own members.
The groups political wing says it is a democratic alternative
US-based Human Rights Watch (HRW) has interviewed former members who claim they were punished for criticising the organisation or wanting to leave.
They alleged abuses ranging from detention, solitary confinement, beatings and torture.
But the Peoples' Mujahideen said their testimonies were unreliable.
For more than 15 years before the fall of Saddam Hussein the group used bases in Iraq to launch attacks against Iran.
The HRW report says that the release of a group of dissident Peoples' Mujahideen members from Iraq's Abu Ghraib prison during Saddam Hussein's last year in power provided, for the first time, a direct window into conditions inside the group's camps.
The report was based on interviews with 12 former members of the group, also known as the Mujahideen-e Khalq Organisation (MKO), now living in Europe.
Each witness was interviewed separately several times between February and May 2005 by telephone, amounting to 12 hours of testimonies, according to the HRW report.
BBC regional analyst Pam O'Toole says the Peoples' Mujahideen is an authoritarian organisation whose ideology combines elements of both Marxism and Islam.
Several interviewees who shared a prison cell in the mid-1990s told HRW that a cellmate died after a severe beating.
One man described being held in solitary confinement for eight-and-a-half years, another for five years. Both were high ranking members who wanted to leave.
Eventually they were handed over to Saddam Hussein's Iraqi authorities who held them in Abu Ghraib jail and later repatriated them to Iran.
MKO's political wing, the National Council of Resistance of Iran, issued a rebuttal following publication of the HRW report.
"The [Peoples' Mujahideen] strongly denies the claims made by Human Rights Watch in this report," it said in a statement.
"These accusations only serve as a licence to the mullahs' regime to continue the execution and suppression of [Peoples' Mujahideen] members and supporters in Iran."
The statement questions the methodology used by HRW to prepare the report such as the use of telephone interviews of people it describes as "12 agents of the mullahs' regime".
"It is not clear how HRW managed to verify claims made over telephone by these individuals, especially allegations of physical torture. How were their identities verified over the telephone?" it said.
MKO is designated as a terrorist organisation in the US and Europe. But HRW says the National Council of Resistance of Iran continues to lobby Western legislators to get that designation lifted and is presenting itself as a democratic alternative to the Iranian government.
HRW says while Iran has a dreadful human rights record, it would be a huge mistake to promote an opposition group that was responsible for serious human rights abuses.