The social cohesion report, published by Monash University and the Scanlon Foundation, measured public attitudes on issues like immigration and multiculturalism.
It found people were five times more likely to hold negative attitudes towards Muslims than any other religious group.
Report author Professor Andrew Markus said the results were troubling.
"What we're finding is negativity towards Muslims is five times higher than towards Christians and Buddhists, so there's quite a significant issue there," said Professor Markus. [ABC News Online] Read more
