41% of respondents surveyed said they had been physically bullied
A "wake-up call" on homophobic bullying in schools is to be launched at an event on gay issues in education.
The new bilingual version of "The School Report" will be distributed to all secondary schools in Wales.
It found 65% of pupils had experienced bullying because of their sexuality. The launch takes place at the Stonewall Cymru annual event in Llandudno.
The education minister Jane Hutt said the assembly government was working to develop guidance on anti-gay bullying.
"The Welsh Assembly Government fully supports the launch of 'The School Report' which highlights the vital role schools can play in preventing and responding to homophobic bullying, both within their boundaries but also in the wider community.
"Tackling the problem of bullying is a huge challenge but one that the Welsh Assembly Government is determined to take on," she said.
Stonewall Cymru said the report was based on the largest poll of young gay people in the UK.
Of those who said they had been bullied, 41% had experienced physical assaults and 17% death threats.
Half of teachers questioned said they did not respond to homophobic language when they heard it in school.
The launch event focuses on education, with expert speakers and personal experiences.
Rhian Keyse, the youth and education officer at Stonewall Cymru said: "This alarming report will be distributed to all secondary schools in Wales, and should act as a wake-up call to everyone working in education.
"Homophobic bullying remains one of the few sorts of bullying about which too many schools still take no action."