Most constabularies in England and Wales are continuing to use the powers "disproportionately" against ethnic minorities, a review by the Equality and Human Rights Commission concluded.
In London, almost 20% of black people were stopped and searched between 2007 and 2008, the figures showed.
Commission chiefs wrote to forces warning they could potentially be sued over possible breaches of the Race Relations Act.
Simon Woolley, EHRC commissioner, said: "It is time that we saw real improvement in these statistics. It is not enough for the police simply to launch new initiatives if those initiatives don't produce results.
"There is little evidence to suggest that targeting black people disproportionately with stop and search powers reduces crime.
"In fact, this report shows evidence that police forces, like Staffordshire and Cleveland, which have used fairer stop and search tactics have not only seen reductions in crimes rates in line with overall trends, but have also increased public confidence in the police.
"It is unrealistic and unhelpful to demand that policing should be perfect. However, police services should strive to work fairly and effectively while respecting basic human rights and discrimination law. Only then can they be said to be 'good enough'.
"The Commission will be looking closely at this research and will be writing to police forces with the most concerning statistics to gain a better understanding of how they are meeting their obligations under the Race Relations Act. We cannot rule out taking legal action against some police forces."
Several police forces increased their use of stop and search against ethnic minorities, with black people being stopped and searched at least six times the rate of white people, the commission said.
Asian people are about twice as likely to be stopped and searched as white people.
London had by far the highest rates of stops and searches with 183 searched for every 1,000 black people.
Hampshire (68.9), Dorset (58.1), Leicestershire (96.7), South Yorkshire (65.2), Northamptonshire (81.1) and Greater Manchester (68.9) were also among the highest.
Among the areas with the most disproportionate use of stop and search powers between black and white people were Dorset, the West Midlands, Hampshire and Nottinghamshire.
The evidence suggests racial stereotyping and discrimination are significant factors behind the higher rates of stops and searches, the commission said.
A Home Office spokeswoman said: "The Government is committed to delivering a policing service, and a wider criminal justice system, which promotes equality and does not discriminate against anyone because of their race. There will be no let-up in driving forward the improvements still needed.
"The National Policing Improvement Agency's 'Next Steps' programme will enable individual police forces to address these issues in stop and search more effectively."
The researchers found that black and ethnic minority youths were over-represented in the criminal justice system.
This over-representation started at the point of entry into the system, and largely continued as young suspects and defendants passed through it.
The Commission's Stop and Think report used data from the Ministry of Justice, the Home Office, the Metropolitan Police and the Office for National Statistics, to analyse trends in stop and search use around the country.
Across England and Wales there were 22 stops and searches per 1,000 people in 2007/08.
If black people were stopped and searched at the same rate as white people in - there would have been around 25,000 searches - instead there were over 170,000.
Anti-terrorism chiefs ordered an escalation in the use of Section 44 powers after the failed bomb attack against the Tiger Tiger nightclub in London's Haymarket in 2007.
That resulted in more than a quarter of a million people being searched in 2008-09 - the highest on record and more than twice the level of the previous year.
But after a public outcry over the use of searches, which disproportionately effect minority groups, Metropolitan Police Commissioner Sir Paul Stephenson ordered them to be scaled back.
Photographers and protesters claimed the powers are used excessively against them.
