Some of China's biggest minority groups are failing to benefit from China's rapid economic development
The report also said greater contact with the rest of China is threatening indigenous cultures and languages.
The findings have been published by the Minority Rights Group International and Human Rights in China.
They assessed the situation of three main ethnic minority groups, the Uighurs, Mongols and Tibetans.
Not only are they becoming increasingly alienated, they are largely missing out on China's economic boom, the report said.
Where their regions are seeing development, the impact is often damaging.
In many cases, the large-scale building of roads and railways is not boosting local economies, but just facilitating the extraction of raw materials - resources to feed growth in other parts of China.
In regions such as Xinjiang and Tibet, it says, the increased access is leading to a greater military presence - and a general diluting of local culture.
"You can adapt to the world and retain your language and culture, and speak a national language as well. You don't need just to speak one language," Clive Baldwin, of the Minority Rights Group International, said.
"But in China, the model that's being imposed at the moment is very much one of one state, one language, one culture and anyone against this is being seen as deviant, "splitist", and we'd say that is entirely inappropriate."
China's leaders are struggling at the moment to address the imbalances in the country's development.
They are well aware of the vast gap between the booming coastal provinces and the much less developed west of the country - and are eager to stifle discontent.
The authors of this report suggest that where minorities are concerned, the policies could be having the opposite effect - stoking feelings of resentment amongst communities who see their own culture and way of life coming under growing threat.
China: Minority Exclusion, Marginalization and Rising Tensions