The review had been ordered after blazes at Aliwal barracks in Tidworth, Wiltshire, and Thiepval Barracks in Lisburn, Northern Ireland.
The findings in the report on single living accommodation used by unmarried troops highlighted "faulty equipment" and "broken or unserviceable infrastructure".
The likelihood of a fire resulting in "significant loss of life, loss of capability and damage to defence's reputation will remain high" unless those "major weaknesses" are addressed, said the report.
The news has been greeted with anger in the House of Lords.
Liberal Democrat peer, Lord Lee of Trafford, said the review's findings were "an appalling indictment of the Ministry of Defence's whole approach to fire safety and to the care of personnel in its charge".
He said: "How does the Minister react to the news that some military personnel deliberately interfere with and disable fire safety systems for their benefit, and others apparently illegally cook meals on camping stoves in their living quarters to save cash?
"Do we not have a military Grenfell just waiting to happen?"
Responding, Tory frontbencher Lady Goldie said the report had been "pivotal in ensuring and securing improvements to fire safety in MOD single living accommodation".
Former Head of the Royal Navy, Lord West of Spithead, agreed it was "a damning indictment of the situation".
"There is no doubt that a lot of the single living accommodation onshore for the military is not really up to standard, and we have to put a major effort into this."
Lady Goldie pointed out that in the current financial year, £4 million was being spent on fire safety improvements in single living accommodation, with a further £9 million earmarked for refurbishment work that included safety upgrades.
Former Liberal Democrat leader, Lord Campbell of Pittenweem, said:
"We can be grateful that changes have been made, but how was it that the circumstances were allowed to arise in which the committee said there had been a lack of priority afforded to fire safety, major weaknesses and an unacceptable degradation of barracks?
"We ask our young men and women to risk life and limb in action. Surely we can go out of our way to ensure that they are safe in their own barracks."
Former Chief of the Defence Staff, Lord Houghton of Richmond, highlighted a section in the report that referred to people being "disillusioned and fatigued by the universally accepted situation that the infrastructure was under-repaired and under-resourced and there was a complete absence of suitably qualified personnel".
He said: "Does the Minister agree that this is another example of the Ministry of Defence attempting to bridge the gap between true capability and resources by the application of hope and risk?"