Sir David Ramsbotham says that conditions at Werrington young offenders institution in Staffordshire were "utterly unsuitable" for 15 to 17-year- olds.
He savagely criticises Prison Service managers who introduced a series of recent changes at Werrington, all of which had been detrimental.
Sir David says: "To find that adult prison conditions have been deliberately introduced, overturning previous and appropriate treatment and conditions for children, is nothing short of disgraceful ...
"I have not come across such totally deliberate and unnecessary impoverishment of children anywhere and suspect that, were Werrington to be a secure custody unit in the hands of the social services, it would be closed for lack of provision of appropriate facilities."
Sir David makes it plain that his criticism is levelled not at the "obviously caring" governor or staff but at senior Prison Service managers who directed the changes in the regime.
Dormitory accommodation was replaced by adult prison-style two-person cells as the number of inmates was doubled to 192. Sir David says young people should not be held in units of more than 60.
Inmates - Sir David called them "children" - had been switched from eating in communal dining rooms, to collecting food from a servery and eating it in their cells, which were "essentially lavatories". There was inadequate medical cover to look after teenagers who threatened to injure themselves and the sports hall had no showers or lavatories.
Association time was limited to two evenings a week on landings with no chairs - so inmates simply stood around outside their cells. The number of inmates who deliberately hurt themselves was abnormally high and the effect of the regime was to introduce young people to imprisonment, rather than offer an alternative to a life of crime.
The Howard League for Penal Reform said the report was "extremely damning". Spokeswoman Fran Russell said: "There perhaps needs to be an investigation into what happened here. They had some money to make some changes and what they did was to create something much worse than was there before."
Paul Cavadino, of the National Association for the Care and Resettlement of Offenders, said: "The overcrowded conditions which the Chief Inspector found at Werrington were a result of the courts' increasing punitiveness towards young offenders.
"This has produced a 64 per cent increase in the number of juveniles jailed since 1992. The latest figures show that 88 per cent of these young people are reconvicted within two years of release."
Richard Tilt, director-general of the Prison Service, said he had commissioned an "urgent report" into conditions at Werrington and admitted that there was need for "substantial improvement".