Some children turn to prostitution at an early age
The findings reveal as many boys as girls suffer from sexual exploitation, while most of the offenders are known to their victims.
The three-year investigation, which was commissioned by the US Government, calls for urgent measures to be taken to tackle the issue.
'Survival sex'
Researchers visited 17 US cities and interviewed local law enforcements agencies, child welfare groups and hundreds of children to gather information.
The study's author, Richard Estes, a professor of social work, said he was stunned by the results.
"That figure just blew our minds. We never at the beginning of the study thought we would encounter so many children in this predicament," he told Reuters news agency.
Mr Estes' team found that children who had run away from home formed the largest affected group, using "survival sex" to obtain food, clothing and shelter.
"Street children are exposed to violence, drug abuse, rape and, sometimes, even murder at the hands of the pimps, 'customers' and traffickers that make up their world," the report's author told Reuters.
Professor Estes says contrary to popular belief, strangers account for less than 4% of sexual assaults against minors.
"It is ironic that running away from home increases their risk of physical violence and sexual abuse," Mr Estes told the news agency.
Although a large number of victims were boys, their complaints were often not taken as seriously as those from girls because of a feeling boys should be able to protect themselves better, the report says.
Chat rooms
One area where attention has been focused is the internet, where sexual predators use chat rooms to lure unsuspecting children.
A recent survey showed nearly a fifth of American children between the ages of 10 and 17 reported unwanted approaches from strangers online.
As part of the measures being taken to crack down on child abuse, 30 specialist units dedicated to tracking down culprits on the internet have been set up across the country, where undercover detectives search internet chat rooms for offenders.
"It's extremely graphic, most of it's sexual. What we see is anything from infants all the way up and that comes across constantly, things that just shock the conscience and the mind," one detective told the BBC.
Mr Estes' research also investigated child abuse in Mexico and Canada, the results of which will be released soon.