The US-based group Human Rights Watch (HRW) said on Monday that prisoners have been beaten with cables and hose pipes, and suffered electric shocks to their earlobes and genitals.
Some have been starved of food and water and crammed into standing-room only cells, HRW said.
"The people of Iraq were promised something better than this after the government of Saddam Hussein fell," Sarah Leah Whitson, executive director of the group's Middle East and North Africa division, said.
"The Iraqi interim government is not keeping its promises to honour and respect basic human rights. Sadly, the Iraqi people continue to suffer from a government that acts with impunity in its treatment of detainees."
HRW said it interviewed 90 Iraqi prisoners between July and October last year, just after the government of interim Prime Minister Iyad Allawi assumed power from the US-led forces which ousted Saddam Hussein.
Seventy-two of the 90 said they had been tortured or mistreated.
"Detainees report kicking, slapping and punching, prolonged suspension from the wrists with the hands tied behind the back, electric shocks to sensitive parts of the body ... and being kept blindfolded and/or handcuffed continuously for several days," the group said in a report.
"In several cases, the detainees suffered what may be permanent physical disability."
The report also said Iraq's intelligence service had violated the rights of political opponents.
It highlighted the systematic use of arbitrary arrest, pre-trial detention of up to four months, improper treatment of child detainees and abysmal conditions in pre-trial facilities.
The report follows a scandal over US treatment of prisoners in the US-run Abu Ghraib prison, which erupted last year after the discovery of photographs showing prisoners being tortured and sexually abused.
While the HRW report looked solely at Iraqi institutions and did not address torture of prisoners by US soldiers, it said international police advisers, mostly Americans, had turned a blind eye to Iraqi abuse.
"The Iraqi security forces obviously face tremendous challenges, including an insurgency that has targeted civilians," Whitson said.
"We unequivocally condemn the insurgents' brutality. But international law is unambiguous on this point: No government can justify torture of detainees in the name of security."
Iraq's justice minister did not challenge the findings of the report, saying it would be unrealistic to expect a flawless judicial system in a war-torn country such as Iraq.
The government's record will be tested in a general election on Sunday.
"A new Iraqi government requires more than a change of leadership," Whitson said. "It requires a change of attitude about basic human dignity."