The analysis by academics at the London School of Economics for the All Party Parliamentary Group on a Better Brexit for Young People said there was "deep concern" about the "negative impact" of last year's referendum vote.
The report based on the findings of 40 focus groups and a survey of more than 3,200 young people and adults found young people were concerned about the loss of opportunity as well as the impact on Britain's image as a tolerant, multicultural society.
"A significant majority express bemusement, anger, and resentment at the choice to leave the EU, which was made - in their view - primarily by older generations," the report said.
"Young people in our study are concerned about the negative impact of Brexit on multi-ethnic communities in terms of rising intolerance, discrimination and racism in British society and the decline of Britain's tolerant and multicultural image."
In contrast a "small minority" of young people in the study expressed optimism - either voicing pride in Britain, or suggesting Brexit was positive for the UK because it had motivated young people to become less passive.
The all-party parliamentary group chair, Labour MP Stephen Kinnock, said he hoped the report would be the catalyst for a "national conversation" on Brexit.
"Young people want a voice in the Brexit process, and not one that is politely listened to and then dismissed," he said.