The Chief Inspector of Prisons said Hindley young offenders institute had some real strengths and was doing some very good work with young people.
But Nick Hardwick said as with other young offender institutions, it was having greater difficulty in keeping young people safe.
HMYOI Hindley can hold 440 boys and young people aged 15 to 18. At the time of its inspection it was just over one-third full.
Inspectors said the arrangements for a young person's first few days at Hindley were particularly good; the quality of education and activities was good. Young people made solid progress and obtained qualifications, which was particularly noteworthy as many had previously been excluded from school.
They added that relationships between staff and young people were generally good and some young people spoke very highly of the officers who dealt with them.
However, inspectors said they were concerned to find that the very good arrangements for young people's first few days were undermined by the National Offender Management Service requirement that every new arrival should be strip searched; half of young people left Hindley without a confirmed education or training place, threatening to waste the progress they had made there.
Inspectors said they heard persistent, consistent and credible complaints about the abusive behaviour of a small number of officers; on average there was a fight or assault almost every day, some of which were very serious.
The campaign group INQUEST, which has been working with the family of 17 year old Jake Hardy, who died at Hindley, said it was concerned.