Homophobia is damaging people's health and careers across Europe and the problem may be worse than reported because victims are scared to draw attention to themselves for fear of a backlash, an EU study said.
The EU Agency for Fundamental Rights said police in most countries were incapable of dealing with homophobic crime - ranging from verbal abuse to deadly attacks - and said many governments and schools failed to take it seriously enough.
This creates a vicious circle, with victims preferring to remain "invisible" rather than being open about their sexual orientation or reporting abuse to authorities, the study showed.
"From their early years, the derogative words used for gays and lesbians at schools teach them to remain invisible," said the study.
"They often experience harassment and discrimination in the workplace (and) in many countries they cannot secure their relationships to one another as legal partners."
The study recommended anonymous reporting of homophobic crime to combat the problem, highlighting pilot projects in The Netherlands, Denmark and Slovenia as good examples.
Some serious cases of discrimination involved asylum authorities, with people denied refuge because officials did not believe they were fleeing persecution due to their sexuality.
In terms of health care, discrimination can mean people avoid seeking help and in some cases were treated as if their sexual orientation were a "disturbance or sickness".
The report, which brought together research from 27 countries, said over half of EU citizens thought discrimination on the grounds of sexual orientation was widespread in their country.
Bulgaria, Estonia, Latvia, Poland and Romania were singled out for being hostile towards "gay pride" rallies and people from countries in the region were generally less comfortable with having a homosexual as a neighbour, for example.
Only three EU states - Belgium, The Netherlands and Spain - gave full marriage rights to lesbians, gay men, bisexuals, transsexuals and transgender people, while most of the other countries do not award any rights at all.