Nun and priests were aware sexual abuse was taking place at the Aberdeen home but did nothing about it, Lady Smith concluded.
Her report documents specific incidents that took place involving children as young as seven.
One former resident – known only as Jack – told the inquiry a caretaker used to take him to a boiler room or small upstairs room.
Jack said he would then be tied up and a gag put in his mouth, adding: “He would caress me at first and then slap me. He would then beat me up.”
Another child, Ned, described how he was abused by a man or older boy who fondled him in the television room and in the toilets at the home.
A man who was employed to drive a van for the Sisters of Nazareth was known to interfere with children, and youngsters told each other to “beware of him”.
Another boy told how he was sexually abused by a man over the course of three or four years in the late 1960s and during that time wrote “letters to God”, which he hid in a cupboard.
Explaining why he wrote them, the man said: “I felt dirty and that kind of thing with the abuse that had been going on. I wanted God to stop it.”
In 1997 he reported the abuse to the police and officers took a statement.
However, there was no prosecution as police told him the abuser had already died. In actual fact the man died in 2000.
Lady Smith said: “It is a terrible indictment of the order that children in its care became the victims of sexual predators who saw children in the order’s care as easy targets.
“Adults, including sisters and priests, were aware of the abuse but took no action in relation to the abusers.”