UK armed forces are understaffed, with rising numbers of personnel quitting early, the government has been warned.
Some troops were sent on missions too frequently, said the report
The National Audit Office says the are 5,170 below strength and since 2001 have operated at or above predicted deployment levels.
The strain of fighting in Iraq and Afghanistan at the same time, is one reason for shortages, the report said.
The MoD agreed operating at this level meant "additional strains" on staff, but denied forces were overstretched.
The National Audit Office warned the armed forces were 2.8% short of full strength - total personnel is now 180,690.
The NAO report found that, for the past five years, they had "consistently operated at or above the most demanding combination of operations envisaged" by defence planners.
While the armed forces have reached 98% of recruitment targets since 2000-2001, there are major shortages in certain trades.
BBC defence correspondent Rob Watson said the armed forces traditionally operated below strength, but there appeared to be "incredible shortfalls" in some specialist areas.
"Nuclear watchkeepers", the engineers on Trident submarines, are 29% under strength, the RAF's specialist weapons system operators are 50% down and there are severe shortages of army bomb disposal experts.
Worst hit are medical services, with reservists filling the 66% of vacant A&E and intensive therapy nurses posts.
And Navy crews have been sailing on average 12% below strength, the report found.
Shadow Defence Secretary Liam Fox said the "damning report" showed the government must be prepared to pay more for the increased operations faced by the armed forces.
"The gap between our commitments and our resources is growing and putting unacceptable pressures on our service personnel and their families," he said.
For the Lib Dems, Nick Harvey said: ""The consequences of prolonged overstretch on our Armed forces could be disastrous. Pinch points in key services are of grave concern."
The Royal Marines had been undermanned for a decade while gaps between Army tours of duty were getting shorter all the time, he added.
The report found that 14.5% of soldiers were being sent on missions more frequently than recommended under Army guidelines.
Rising numbers were leaving early, 9,200 in the last year had left before their period of engagement was up - some blaming too many deployments and the impact on their families.
Recruitment was also a problem, the report suggested, due to controversies over Iraq and Deepcut barracks.
Army: 100,010 (1.8% below strength)
RAF: 45,210 (4.5% below strength)
Navy: 35,470 (3.6% below strength)
Source: NAO (July 2006)
And two thirds of British teenagers are now considered too fat to join the Army, it found - with just 33% of 16-year-old boys meeting the Body Mass Index target of 28 - which has since been raised to 32.
Defence Minister Derek Twigg admitted the forces faced a "particularly high level of operational commitment" but said steps had been taken to help.
He told the BBC Army recruitment was up 10% this year, adding: "The NAO report says we need to do more to retain skilled individuals, and for instance the new £2,240 operational allowance should help to address this.
"Of course, we're looking at other improvements as well in terms of accommodation, equipment, training, and of course other financial incentives."
Adrian Weale, from the British Armed Forces Federation, told BBC Five Live defence funding was based on assumptions made in the late 1990s.
He said: "We were never expected to be having to mount these two - what are called medium-scale enduring operations [in Iraq and Afghanistan]- at the same time.
"And that's put a lot of pressure on the armed forces."