They include extending the use of electronic monitoring, more protection for victims and witnesses and tougher sanctions for those who flout bail.
Chairman Lord McLean said a balance had to be struck between accused people's rights and public safety.
The commission was set up by the Scottish Executive and was launched in 2003 amid concerns at the high number of offences committed by people who had been granted bail.
An increasing number of suspects being remanded in custody has also led to a growing prison population.
Recent figures suggest that about 30% of those granted bail and freed by the courts go on to commit further offences, typically between three and four per person.
However, just under 20% of the rapidly rising prison population is in custody awaiting trial, increasing pressure on accommodation.
The aim of the Sentencing Commission's review is to reduce the pressure on Scotland's prisons, whilst safeguarding the public.
Tougher sanctions for those who defy the courts by failing to appear without a reasonable excuse.
The commission said it accepted that by dealing more robustly with bail offenders, there could be a short-term increase in the prison population.
However, it believed that the greater transparency it was encouraging in process and procedures "should mean that the lost respect for the law in this area is restored".
This would bring about a reduction in offending by those on bail.
'Cardinal principle'
Lord McLean said: "Our review of this complex area of law and practice, in which there are obvious competing interests, has been as thorough as we could make it.
"We have required to keep foremost in our minds the cardinal principle of our criminal justice system - that an accused person is presumed to be innocent until proved guilty."
The Justice Minister, Cathy Jamieson, welcomed the report and said ministers would consider the 38 recommendations, some of which may need legislation, before formally responding in the summer.
Cathy Jamieson: Welcomed the commission's report
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"I am heartened also that the commission recognise the need for tougher sanctions on those who abuse the decision to grant them bail," she went on.
"Again, we have heard howls of protest from some when we have raised the prospect of trials in absence in these cases.
"However, I believe trial in absence for those who breach bail should be more widely available in our non-jury courts a proposal I set out in my Summary Justice reform paper last month."
Scottish National Party justice spokesman Kenny MacAskill said his party supported the new proposals "in principle".
He said: "They are a positive step forward, and if implemented will provide a range of much needed options for the Scottish courts system.
"It is vital, however, that any significant changes like these should not be adopted in a piecemeal manner and so must be applied in a consistent and uniformed manner across the country."
Change lifestyles
Scottish Tory justice spokeswoman Annabel Goldie said the focus should be on "protecting the public".
She said: "The executive needs to deal with the real issues instead of fobbing off the Scottish people with politically motivated measures to save face in the wake of the scourge of crime which has swept our country."
Ms Jamieson announced that Lord Macfadyen would lead the next phase for the Sentencing Commission.
Members of the review body include the former Lord Advocate Rt Hon The Lord Mackay of Drumadoon, Sheriff Rita Rae QC and Dumfries and Galloway Chief Constable David Strang.
Criminal justice charities say more resources are needed to allow offenders to be helped while they are out on bail.
Susan Mathieson, director of the community safety charity Sacro, said extra resources would allow a social worker or probation officer to work with offenders, helping them to change lifestyles.