More than 1,000 children a year pass through the centre's doors
Detention at an immigration removal centre is still "distressing and harmful" for children, the children's commissioner for England has said.
Yarl's Wood, in Bedfordshire, remains "no place for a child", Sir Al Aynsley-Green said, although some conditions have improved since 2008.
He highlighted in particular loud or violent arrests, separation from parents, and a lack of information.
The UK Border Agency disputed the report's findings.
Families are detained when courts have denied their asylum claims and they have refused to return home voluntarily, according to the Home Office.
More than 1,000 children are detained every year, for an average of about two weeks, official figures show.
But in one case a family was held for 70 days, Sir Al's progress report found.
The UK Border Agency says this happens only in "exceptional" circumstances.
Sir Al demanded reviews of welfare and healthcare protection procedures, describing systems to safeguard children, and a lack of paediatric expertise, as "high-risk".
He cited the case of a five-year-old girl waiting 24 hours for hospital treatment because a nurse failed to diagnose a broken arm from a fall in the centre's playground.
He also claims too little is done to offer children inoculations before deportation.
Sir Al said: "Ultimately, I would like to see a far faster process and an end to the detention of children in the asylum system.
"But I recognise an end to child detention won't happen overnight.
"I commend [the UK Border Agency] and its staff for improving conditions at Yarl's Wood over the last year, but further work is still needed to improve arrest procedures and detention conditions to make the experience less distressing for and harmful to children."
Sir Al praised the UK Border Agency for stopping the use of caged vans to transport children to the centre.
But he said this may have had the unintended consequence of separating parents and children, as more were now transported in separate vans.
Among the children's complaints were that arresting officers acted in a "terrifying" way, "bashing and kicking" at doors, were "rude" and watched as youngsters used the toilet or dressed.
The report said "progress in a number of areas" included:
- Children's forums helping to influence training to make arrest less distressing
- Improved systems to allow children to make complaints
- "Pleasant" new classrooms, with "less prison-like" uniforms for staff
- Greater provision of play equipment
- Improvements in healthcare provision and arrangements for pregnant and nursing mothers
Despite this, concerns remain over the children's psychiatric and developmental welfare.
The report says children are still unable to retrieve friends' contact details from confiscated mobile phones, or find out what happened to their pets after arrest.
Home Office Minister Meg Hillier said that treating children "with care and compassion is an absolute priority for the UK Border Agency".
She added: "We take the detention of families very seriously. We believe that children should not be separated from their parents.
"We always release families where advised it is in their best interests by independent social workers and specialist medical professionals.
"We only detain families when the independent courts conclude they have no right to remain in the UK. We encourage families to return voluntarily, avoiding the need for detention. If they refuse to return, we have no choice but to enforce their removal."
David Wood, strategic director of criminality and detention at the UK Border Agency, said the majority of cases of prolonged detention of families were the fault of parents making "vexatious" legal claims and using judicial review to delay deportation.
He said several families every month were released after recommendations from staff that the children were suffering.
"Where we have detained children as part of the family unit, it's as a last resort," he said.
In the case of the broken arm, the agency said the nurse had been given "additional training", and claimed healthcare at the centre was as good as outside.
Dr Rosalyn Proops, officer for child protection at the Royal College of Paediatrics and Child Health, backed calls for an end to child detention.
"These children are among the most vulnerable in our communities and detention causes unnecessary harm to their physical and mental health," she said.
Lisa Nandy, from The Children's Society, added: "It is outrageous that children in the UK are subject to such inhumane treatment at the hands of the state."
Sir Al and his team used documentary evidence, visits and interviews with detainees to come to their conclusions.