The church must also not hush up allegations of abuse, added the report of a commission headed by Lord Nolan, a former appeals judge.
``We believe that the Catholic Church in England and Wales should become an example of best practice in the prevention of child abuse and in responding to it,'' Nolan said.
Between 1995 and 1999, 21 of the 5,600 Catholic priests in England and Wales were convicted of offenses against children, and two archbishops have been embroiled in controversies about their handling of pedophile priests.
The report said the church should set up a national child protection unit and that every parish should have a designated child protection representative. It said bishops and religious superiors should not overrule selections boards where there are questions about the suitability of a candidate for ordination or appointment.
Anyone who refuses to consent to a records check should not be appointed, the report said.
Any allegation of abuse should be investigated swiftly, the report said, and the person making the allegation should be encouraged to tell police, social services agencies and the child protection officer appointed by the diocese or religious order.
``Our hope is that this report will help to bring about a culture of vigilance where every single adult member of the church consciously and proactively takes responsibility for creating a safe environment for children and young people,'' the report said.
In a BBC television interview before the report's release, Archbishop Vincent Nichols of Birmingham said the church has learned a great deal in recent decades.
The church in England and Wales published its first report on child abuse in 1994, emphasizing that the church should work closely with child protection teams, government authorities and other professionals.
The church commissioned the Nolan report last year.
The archbishop of Westminster, Cardinal Cormac Murphy-O'Connor, was caught up in controversy last summer over his decision to assign a priest to the Gatwick airport chapel despite concerns about the priest's behavior.
The priest was subsequently convicted in nine sex attacks, including one with a boy he met at the chapel, and he served 42 months in prison.
The archbishop of Cardiff, John Ward, was also accused of ignoring allegations against two priests. Ward, who was recovering from an illness, was relieved of responsibility for his archdiocese in December.
Murphy-O'Connor said the independent report was ``extremely constructive and helpful'' and would be discussed by all the bishops of England and Wales at their meeting next week.
The Church of England also has struggled with the problem of pedophiles in positions of authority. Church of England bishops issued guidelines in 1999 calling for all candidates to be checked for criminal convictions, though it left bishops some discretion on whether an individual should be disqualified for past offenses.