The BBC must act to stop a long-term decline in ratings for children's shows like Blue Peter and Newsround, its governing body has warned.
The BBC Trust said the decline had been made worse by the shows being moved to earlier time slots after Neighbours was dropped from BBC One a year ago.
But the BBC said audiences for the two shows had risen since the review.
The report into programmes and services for children found they were popular and appealed to a wide audience.
BBC Children's, the area under review, has an annual budget of £125m and is responsible for two digital children's channels, CBBC and CBeebies, as well as contributing output to BBC One, BBC Two, Radio 4 and digital radio channel BBC 7.
The trust consulted with licence fee payers as well as holding an online consultation with children.
Mehmuda Mian, who led the trust's review, said the BBC was performing "very well" in its services for children.
"The trust believes that the BBC must remain a cornerstone of high-quality, UK-produced children's content."
The report said that CBBC-produced programmes and services, including Newsround and Blue Peter, contributed to the corporation's remit to promote citizenship and international awareness.
The decline in viewing figures of the programmes, both shown on BBC One, had been accelerated "by the scheduling changes", it added.
The report said that, after Neighbours was lost to Five, quiz show the Weakest Link had been moved from BBC Two to BBC One "to prevent a loss of audience immediately before the BBC News at Six".
"As the Weakest Link is longer than Neighbours, children's programming was moved 20 minutes earlier, reducing the amount of time available for children's content on BBC One after school."
As a result, overall weekly reach to CBBC content on digital and terrestrial TV had fallen by 5% among six to 12-year-olds in autumn 2008, the report found.
Former Blue Peter presenter Peter Purves said he felt the decline in viewing figures for the programme is "maybe the beginning of the death".
"When we did it we were talking about millions - eight and a half million were watching in the winter and five and a half million in the summer.
"You'll never get those figures again - you couldn't.
"I think audiences change and times change and the opportunities not to watch are legion," he added.
Purves also said that he thought the show's move in the schedules has contributed to its decline.
But a spokesman for BBC Children's said figures for Blue Peter and Newsround had steadily risen since autumn 2008.
The trust asked for plans to be drawn up to "boost the audience numbers" for shows which contributed to the BBC's remit.
The report found that awareness of and audience numbers for the small number of BBC radio programmes made for children were "very low".
That programming consists of CBeebies shows for young children and the Big Toe Books programme for older children - both on digital radio station BBC 7 - and magazine show Go4it on Radio 4.
The BBC had already agreed to recommend a different approach to radio for children, the report added.
"We are delighted that the BBC Trust has concluded that CBeebies and CBBC are at the heart of the BBC's public service remit and that they are performing strongly on both TV and online," the BBC said in a statement.
"We welcome the trust's key recommendations, and will submit our responses over the next six months, in particular regarding CBeebies Radio."
In terms of contributing to the corporation's goals on citizenship and international awareness, the BBC would seek "the best ways of continuing to reach children via TV and the web and the overall investment plan for BBC Children's", the statement added.