The report commissioned by the Netherlands-based Wetlands International says Malaysia is uprooting an average 2 percent of the rain forest a year on Sarawak, its largest state on the island of Borneo, or nearly 10 percent over the last five years. Most of it is being converted to palm oil plantations, it said.
The deforestation rate for all of Asia during the same period was 2.8 percent, it said.
In the last five years, 353,000 hectares (872,263 acres) of Malaysia's peatlands were deforested, or one-third of the swamps which have stored carbon from decomposed plants for millions of years.
"We never knew exactly what was happening in Malaysia and Borneo," said Wetlands spokesman Alex Kaat. "Now we see there is a huge expansion (of deforestation) with annual rates that are beyond imagination."
The study was carried out by SarVision, a satellite monitoring and mapping company that originated with scientists at Wageningen University in the Netherlands.
"Total deforestation in Sarawak is 3.5 times as much as that for entire Asia, while deforestation of peat swamp forest is 11.7 times as much," the report said.
Malaysia's peatland forests are home to several endangered animals, including the Borneo Pygmy elephant and the Sumatran rhino, as well as rare timber species and unique vegetation
Kaat said the study showed deforestation was progressing far faster than the Malaysian government has acknowledged.
Scientists say the destruction of the Amazon, the rain forests of central Africa and in Southeast Asia accounts for more than 15 percent of human-caused carbon emissions blamed for global warming.
Live forests soak up carbon from the atmosphere, while burning trees release that stored carbon - contributing to climate change in two ways at once. But emissions effect is amplified when trees are felled from the peatlands and the swamps are drained for commercial plantations.
Malaysia and Indonesia produce about 85 percent of the world's palm oil, an ingredient in cooking oil, cosmetics, soaps, bread, and chocolate. It also is used as an industrial lubricant and was once considered an ideal biofuel alternative to fossil fuel, but it has fallen out of favor because of earlier reports of widespread rainforest destruction for the expansion of plantations.
Indonesia has pledged to slow deforestation in its territory, and last year Norway pledged to give Jakarta $1 billion a year to help finance an independent system of monitoring and quantifying greenhouse gas emissions.