Teenagers leaving care are being offered housing "of the poorest quality", according to a report from a Holyrood committee.
And the care system is failing to provide young people with the life skills needed to live by themselves, members of the Equal Opportunities Committee said.
"Not only are young people getting out of homelessness unable to furnish their tenancies with the very basics, they are also being offered housing of the poorest quality," the committee said in a report on youth homelessness.
"It is of course utterly unacceptable for anyone to be offered such housing."
During an inquiry into the problem, MSPs were told that leaving care can be a "very abrupt" experience for young people.
They "heard time and again" that young homeless people emerged from their families, from schools and from care without the skills needed to live by themselves.
MSPs were "particularly struck by the evidence disclosing the profound disadvantage to young people of not possessing essential life skills".
They highlighted how young people leaving care and setting up home on their own could "find the experience highly isolating".
Committee convener Mary Fee called for action from ministers to tackle the issues.
"We were very troubled to hear from 16-year-olds leaving care with a real lack of essential life skills, such as budgeting, being put into utterly unacceptable, substandard accommodation and left isolated in an unsupported tenancy.
"The Scottish Government must ensure that more consistent preventative work is undertaken and life skills taught in schools, that minimum standards for accommodation are met and our most vulnerable young people are supported at such a crucial time in their lives."
Community care grants, available to those on low incomes moving out of care and into a tenancy, should be made available when people first move into a property, rather than weeks or months later, the committee suggested.
Mediation and respite to give youngsters a break from their families and education are "vital elements" in preventing homelessness, the report said.
The Scottish Government needs to assess the effectiveness of strategies used to try to stop young people from becoming homeless, the committee said.
A Government spokesman said: "Tackling homelessness amongst people of all ages is a key priority for the Scottish Government. Being left without a home is a massive blow at any age and we are well aware of the devastating effect it can have on young people just starting out in life.
"Actions like working closely with councils to ensure they engage with children leaving care, and embedding life skills and financial education into our schools through Curriculum for Excellence are making a difference.
"But there is absolutely no complacency and we will consider the reports recommendations carefully, in particular to improve the consistency of care across all levels of government."
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