The discrimination and harassment have led 50% of 365 queer student survey respondents to hide their sexual orientation/gender identity from people on campus.
And 31% of respondents said they specifically avoided disclosing these features to university staff for fear of "negative consequences".
Otago University Students Association queer support co-ordinator Hahna Briggs said she was not surprised by the findings.
"A lot of people talked about derogatory comments. Quite often they occurred at night."
The survey of students between April 2014 and April 2015 was part of a wider campus climate survey that showed "women across the board" experienced high levels of harassment, she said.
The student support service was working with Campus Watch staff to ensure staff were aware of the ongoing issues.
Despite half of the respondents reporting they had concealed their sexual orientation/gender to avoid intimidation, 89% of queer students said they felt the campus was friendly.
University of Otago vice-chancellor Prof Harlene Hayne said she wanted all students to feel safe on campus.
"We want all of our students to feel safe and valued at the University of Otago.
"I am pleased that, by and large, LGBTAQ students have a positive perception of life on campus, but I am also keen to make sure that these students, like all students, feel supported here."
The survey of queer students’ perceptions of services and responses to sexuality and gender was the first of its kind at a New Zealand university, Ms Briggs said.
The report recommended ongoing training for University of Otago support staff, more initiatives to raise awareness of queer issues on and off campus, gender-neutral toilets, increased efforts to address discrimination and increased promotion of the OUSA queer support service.