The Whale and Dolphin Conservation Society (WDCS) claims there is no evidence that swimming with dolphins helps people with physical or learning difficulties.
It says the practice is dangerous, because dolphins could attack humans and there is a risk of disease transmission between the species.
In a report, Dolphin Assisted Therapy (DAT), the group says: "In spite of the number of anecdotal accounts which appear to promote its success as a therapy and the growing number of captive dolphin facilities establishing to offer it, DAT remains a controversial therapy."
The report goes on: "It involves two highly vulnerable groups of individuals - the people undergoing the therapy who may be affected by psychological or physical disabilities and the dolphins used, who are either confined in captivity or part of a wild population that may suffer from human disturbances."
Stressing that the welfare of humans and animals involved is paramount, the group claims the practice could be harmful to both sides.
It says: "Dolphins are wild animals and are unpredictable and people have been injured swimming with dolphins, sometimes seriously."
The report says that dolphins could transmit brucellosis to humans and adds that there have been reports of humans infecting dolphins with chickenpox, against which the animals have no natural defences.
The authors also warn that commercial trapping of dolphins for the therapy had "serious conservation and welfare implications for the animals".
The report goes on: "DAT has considerable potential for harm for both the human and dolphin participants in terms of possible injury and high expectation, and to their families, in terms of monetary expense."
It adds: "There is no scientific evidence to demonstrate its long-term effectiveness as a therapy and viable alternatives exist." It calls for an end to dolphin- assisted therapy.
Cathy Williamson, a joint author of the report, said dolphins in captivity had been shown to suffer from high levels of stress.
"That makes them more vulnerable to disease and more unpredictable. Research in America has shown people who work with marine mammals are more prone to infection or injury."
She added that the therapy was "marketed for a huge range of disabilities and diseases".
But Ms Williamson said: "We feel there is something wrong about that, and the whole industry and any claimed benefits should be further investigated."
But the Round Table Children's Wish charity, which pays for seriously ill young people to swim with dolphins, insisted it gave "tremendous" pleasure and opposed a ban.
A spokeswoman said swimming with dolphins was one of the most popular request from the terminally ill children the charity helps.
She stressed that the swims organised were not specifically therapeutic.
But she insisted: "We do it in a very controlled way and there are limitations depending on the condition of the child.
The enjoyment it brings is tremendous, not just for the child, but for the family of that child."
DOLPHINS CHANGE IVAN'S LIFE
IVAN McGaw's life was transformed after he attended a special clinic in the US for therapy with dolphins, according to his mother Wendy.
The seven year old was born with a rare condition which meant the two halves of his brain were not connected.
Mrs McGaw said that he could not speak, had been unable to show emotion and did not interact with other people.
But she said after one three-week trip to Island Dolphin Care Centre in Florida for intensive therapy, which included swimming with dolphins, Ivan showed an immediate improvement.
Mrs McGaw said: "Unless you have witnessed the good this kind of therapy can do, you won't believe it.
"My son would still be locked in a wee private world if it wasn't for therapy with dolphins."
Mrs McGaw, from Dunfermline, added she and husband Alan had since spent thousands on two further trips to the same centre.
She said: "After we came back the first time, the improvement continued - Ivan walked up to Alan and said 'daddy' for the first time.
"He has really come on since and I don't believe we would be where we are today without the dolphins."
Mrs McGaw dismissed the risk factor from swimming with dolphins - and insisted a ban was "ridiculous".
And she pointed out: "There is a risk from every animal - dogs can turn on you, but nobody's suggesting contact with them should be banned."