The children, mostly girls, suffer at the hands of employers for whom having servants is often a sign of social status, according to a study by the International Labor Organization.
They rarely are paid, sometimes suffer sexual abuse and even forget their own names after years of being called simply "girl" or "boy," said June Kane, author of the 112-page ILO study.
Kane declined to single out any countries, but the report cited cases in Latin America, Asia and South Africa.
The report -"Helping Hands or Shackled Lives?" — was released in connection with the annual World Day Against Child Labor on Saturday.
Kane said child labor was common in Europe a century ago, but that social reformers ended the practice. She said she wasn't concerned about children helping their parents at home.
"I come from a poor family myself," said Kane, recalling her 1950s childhood in Liverpool, England. "When I was young I was expected to earn my pocket money" by sharpening pencils for her artist father.
"I used to tell my parents they treated me like a slave," Kane told reporters. "Unfortunately there are children in the world who are treated like slaves and whose work in the house goes way beyond sharpening pencils."
Child servants must light fires before their employer's family wakes up, the report said. They cook, clean and take other youngsters to school — "one of the saddest things," Kane said.
Some combine tasks around the house with jobs in home-based workshops, where they may end up operating dangerous machinery or handling hazardous chemicals.
When they are considered too old, many are kicked out by their employers but end up living on the streets because they have no idea how — or where — to find their families.
The report said that around 2 million children work as domestic servants in South Africa, 559,000 in Brazil and 264,000 in Pakistan.
Some 700,000 children work in the Indonesian capital, Jakarta, alone; 300,000 in Dhaka, Bangladesh; and 150,000 in Lima, Peru.
"Sadly, many countries don't see domestic child labor as a problem," Kane said.
Employing youngsters is not only widely accepted but often considered an alternative for poor families who no longer have to feed them, the study found. Parents rarely receive money in exchange.
Increasing numbers of AIDS orphans and the traditionally low status of women and girls in many countries also push children into domestic labor, the ILO said.
Domestic service also is seen as preparation for marriage for girls, and employers are often viewed as benefactors, it said.
The New York-based group Human Rights Watch said it had conducted a similar study and found the same problems.
"Child domestic workers around the world endure abuse as well as exploitation," said Jo Becker, head of Human Rights Watch's campaign for youngsters. "Instead of turning a blind eye ... governments need to take steps to ban it."
The group's investigations in West Africa, Central America and Asia found girls as young as 8 working 15 or more hours a day, seven days a week, for little or no pay.
Another ILO study released earlier this year said poor countries that eliminate child labor could see massive economic gains within a generation, eventually outweighing the cost of taking youngsters out of the work force.
Most of the gains would be due to higher productivity and reduced medical costs for people who go to school as children and avoid unhealthy working conditions, it said.
About 246 million children worldwide have jobs which take up all or most of the time they could spend in school. Of that number, nearly half are involved in what the U.N. labor agency calls the "worst forms of child labor," including prostitution, mining and slave labor in different industries.
Campaigners are pushing to include domestic labor in the ILO treaty, which already bans these worst forms.