A government-commissioned study by the Assessment Reform Group, carried out at Bristol university, says repeated exams are putting children off school and reducing their learning ability.
The research concludes that repeated testing leads to poor motivation, less effort and lower results.
It says pupils see the point of school in terms of passing tests rather than understanding what they are learning.
The report was written by Professor Wynne Harlen and Dr Ruth Deakin-Crick of the university's graduate school of education.
They say pupils can often see the goals of education in terms of passing tests rather than developing an understanding about what they are learning.
They also judge themselves and others by their test results. As a result, the report says, the gap between lower and higher achieving pupils is widened.
The review says repeated testing lowers pupils' self-esteem, which sets up a downward spiral of lower motivation, less effort and even lower results subsequently.
Serious waste
There are two categories of children particularly discouraged by testing - girls and low-achievers, the report says.
It also suggests repeated testing is a serious waste of resources.
Professor Harlen said: "We acknowledge that some testing is necessary.
"But it is important to recognise that it can be implemented in less damaging ways.
"While the review identified the effects of testing, we have now put together a policy document which highlights the positive actions that can be taken."