The report, the organisation's first on the issue for five years, also says despite progress being made, there is more to be done.
The organisation surveyed 1,614 lesbian, gay and bisexual people between the ages of 11-19.
Fifty-five per cent said they were targeted because of their sexuality.
The government says it is doing more to tackle homophobia in schools.
The National Association of Head Teachers (NAHT) has welcomed the report but agrees more needs to be done.
A spokesman said: "There are many ways in which schools can send messages out to pupils, staff and families to combat negative stereotypes, including recognising the significant contribution made by members of the lesbian, gay, bisexual and transgender community.
"We also note that a school's response to homophobia is now one of the criteria on which Ofsted will judge their success.
"Such moves will, we hope, make it increasingly plain that homophobia has no place in a modern school and, through schools, in society itself."
Daniel Shepphard was bullied at school when he came out at 13.
He is now 17 and has bad memories of his school days.