Some secondary school teachers were guilty of "significantly" over-marking pupils' GCSE English work in a bid to boost results, Ofqual said.
Trainee teachers are set to face more difficult tests in English and maths before they are allowed to start training in the profession.
Two of the UK's biggest teaching unions have voted for further industrial action, including strikes, over pensions, pay and job losses.
Deputy General Secretary of the Association of School and College Leaders Malcolm Trobe said teachers and schools would be "insulted" by Ofqual's report.
An English teacher has told ITV News that Ofqual's report was the "latest in a category of insults against teachers".
Chris Edwards, who wrote an open letter to Education Secretary Michael Gove in September criticising the decline of A* to C GCSE grades, said:
I'd like to say I'm shocked and surprised by this report but it's the latest in a category of insults against teachers.
You can imagine how demoralising this is for youngsters, they've got to resit exams on Wednesday and you can imagine how difficult it is to sit an exam you've already taken.
Ofqual don't seem to make any reference as to what they will do about this situation and they've turned the blame on the teachers which is unbelievable.
Asked whether teachers were under pressure to secure good grades, Mr Edwards said:
Most teachers thrive on that pressure but it doesn't help that every time results go up it's down to exams getting easier.
Christine Blower, general secretary of the National Union of Teachers (NUT), has accused Ofqual of "shifting blame" in a report which suggests pupils have been let down by the exams system.
Ofqual's report into GCSE English exams found that many schools used the marks pupils received in their first exams and the January grade boundaries to work out what score a pupil would need in their controlled assessment and marked it accordingly.
The majority of controlled assessment work was submitted in the summer, and examiners saw evidence of over-marking.
As a result, grade boundaries were raised to take account of this, and led to some students getting lower grades than expected.
Ofqual chief regulator Glenys Stacey said the distribution of this year's GCSE English results, which saw bunching around the C grade boundary, was "shocking".
Ofqual chief regulator Glenys Stacey has said "children have been let down" by school exam systems and that she was "shocked" by the findings of the report.
– Ofqual chief regulator Glenys Stacey
We have been shocked by what we have found. Children have been let down. That won't do.
It's clear that children are increasingly spending too much time jumping through hoops rather than learning the real skills they need in life. That won't do.
Teachers feel under enormous pressure in English, more than in any other subject, and we have seen that too often, this is pushing them to the limit. That won't do either.
Headteachers have said that tens of thousands of teenagers received lower GCSE English grades than expected this year after exam boards moved the grade boundaries between January and June.
An initial report by Ofqual concluded that some of January's assessments were "graded generously" but the June boundaries were properly set and candidates' work properly graded.
The regulator today published its second report, looking at the reasons behind the changes in results.
Teenagers have been let down by an exams system that is abused by teachers who are under intense pressure to achieve good grades, Ofqual has warned.
Teachers in some of England's secondary schools were guilty of "significantly" over-marking pupils' GCSE English work this summer in order to boost results, according to chief regulator Glenys Stacey.
In a new report into the GCSE English fiasco, Ms Stacey said that it is hard for teachers to maintain their integrity, when they believe that others are abusing the system.
She laid blame for the debacle on intense pressure on schools to reach certain targets, which led to over-marking, as well as poorly designed exams and too much of an emphasis on work marked by teachers.
Ministers have unveiled details of plans to overhaul tests taken by prospective teachers, saying they want to raise the status of the profession.
Political Correspondent Romilly Weeks reports:
Judge Neil Ford QC has said there was no attempt made "to provide stimulating and safe environment" for residents at Winterbourne View care home.
All teachers need strong literacy skills and also a good grasp of mathematics.
It is however surprising that Michael Gove is showing such interest in the entry requirements for teacher training courses, while at the same time advocating that schools should be free to employ unqualified teachers.
The real issue is the training and support that teachers are given once they have entered into teaching training.
– Christine Blower, General Secretary of the National Union of Teachers
The morale in the profession is at an all time low.
Unless the Education Secretary addresses issues of teachers’ pay, working conditions and pensions, there will be fewer and fewer recruits to a profession that has never been under such continual attack, regardless of the entry requirements.