Ministers are giving a clear impression that the UK is increasingly putting trade and security above human rights concerns, MPs warned.
There was "plainly a perception" that the issue had been downgraded in the Government's dealings with countries such as Saudi Arabia, Egypt and Bahrain, the Commons Foreign Affairs Select Committee said.
The omission of Egypt and Bahrain from a Foreign Office list of countries requiring special attention helped foster the idea it "has become more hesitant in promoting and defending international human rights openly and robustly", it said.
Last year, the FCO's most senior civil servant made a frank admission to MPs that human rights "is not one of our top priorities" and that the "prosperity agenda is further up the list".
Ministers deny the issue has been downgraded but a string of trade-focused, red carpet visits to the UK by the leaders of countries with some of the worst records of rights abuses has reinforced the perception of a shift of diplomatic emphasis.
Middle East Minister Tobias Ellwood was singled out as a culprit, criticised for telling Parliament he couldn't recall whether he raised human rights while leading a business delegation to Egypt and that relations between London and Cairo were "in a very positive place".
"We are disappointed by (his) choice of language on this occasion and others which raises questions about how energetically the Government is raising human rights issues", the committee concluded.
His "tone" in a debate about the death of Cambridge University student Giulio Regeni - and a visit to Egypt by the committee - suggested the UK "has not been supporting the Italian authorities as forcefully as his murder deserved", the report said.
The Italian national's body was found in a ditch days after he disappeared on the January 25 anniversary of the 2011 Egyptian uprising. The official explanation that he was the victim of robbers is disputed by experts.
They say the killing - which an Italian autopsy found came after "protracted torture" - bears the hallmarks of the state.
The Foreign Office, the report concluded, should be "more mindful of the perceptions it creates at ministerial level, especially when other interests are engaged such as prosperity and security, as is the case with China, Egypt and Saudi Arabia".
The MPs welcomed the doubling to £10.6 million of a dedicated human rights fund - renamed after Magna Carta - but criticised its restriction only to countries receiving overseas aid.
It also called for a relaxation of rules barring groups which were not registered in their own countries, saying it "acts against an intelligent deployment of resources".
While there were concerns about the consequences of funding for such groups - and a need to ensure taxpayers' money was properly spent - funding should be considered for those "which have been suitably vetted but face genuine restrictions".
The MPs also suggested the FCO should set "headline targets" for human rights work. complaining that at present it was hard to evaluate effectiveness, and work harder on engaging campaigners and charities.
Some organisations, especially smaller outfits, reported finding it harder to get access to ministers and officials and perceived engagement "to be more about box ticking than genuine consultation", the MPs noted.
Sonya Sceats, director of policy and advocacy for Freedom from Torture, said Sri Lanka was another country where the promotion of "UK PLC" appeared to trump concerns about abuses.
"We are increasingly concerned that the UK government puts flying the flag for business over and above human rights.
"Nowhere is this mercenary approach more likely to directly cause loss of life or limb than in Sri Lanka.
"At a parliamentary reception just two weeks ago, Foreign Minister Hugo Swire reluctantly acknowledged our evidence of recent torture before inexplicably urging British Tamils to get on planes back to Sri Lanka to boost trade for the UK.
"No matter how inconvenient it is, the UK government should take our clinical evidence of torture more seriously when shaping its policies towards states which are notorious for abusing human rights."
Foreign Secretary Philip Hammond said: "I do not recognise this characterisation of our human rights work.
"Improving human rights is a core function of the Foreign Office and is the responsibility of every British diplomat around the world.
"The UK supports over 75 human rights projects in more than 40 countries and this year we are doubling the funding available for human rights projects to £10 million - a true measure of the importance we attach to this agenda.
"By mainstreaming human rights within the Foreign Office, we have ensured it will always be a central part of our diplomacy, delivering tangible results."
Crispin Blunt, the Conservative MP who chairs the cross-party committee, said: "The actions and words of ministers in the Foreign Office have undermined the excellent human rights work carried out by the Department.
"This needs to be remedied.
"Perceptions, and the symbols that reinforce them, matter, particularly in the context of the UK's soft power and international influence."