The strategies available to resolve malnutrition are not being implemented due to lack of money, skills, or political pressure, researchers said.
"When one in three of us is held back, we as families, communities, and nations cannot move forward," said Lawrence Haddad, lead author of the study and senior research fellow at the International Food Policy Research Institute (IFPRI).
"This not only jeopardises the lives of those who are malnourished, but also affects the larger framework for economic growth and sustainable development. Simply put: people cannot get anywhere near their full potential without first overcoming malnutrition," said Haddad.
Although countries are increasingly meeting goals for combating stunting and wasting, adult obesity - another form of malnutrition - is growing, the report said.
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The prevalence of obesity rose in every single country between 2010 and 2014, and one in 12 adults worldwide now has Type 2 diabetes, it said.
"Too often people think of malnutrition as just a problem of hungry kids in the poorest countries, but this report shows that malnutrition has many forms and affects all countries, rich and poor alike," said Dr Corinna Hawkes, co-author of the report.
Climate change is complicating global efforts to end malnutrition. Even small and seasonal fluctuations in climate can have big impacts on food availability and disease patterns, and these in turn dramatically affect children's survival and development, researchers said.
In a world where many are not eating enough and others are eating too much, food systems also need attention.
Many countries are not on target to meet World Health Assembly targets on nutrition. Most countries are off course in expanding exclusive breastfeeding, and six countries on three continents are regressing badly, the report said.
Countries that are committed to reducing malnutrition have the capability to do so, according to the report.
The Global Nutrition Report is being released on September 22 in New York City.