Fewer than half of Australian students in their first year at secondary school can identify verbs and adjectives, and only one in 14 can spell words such as "definitely".
Most students entering high school this year who sat an English language and literacy assessment test were found to have difficulties with spelling, punctuation and grammar.
The poor results have been blamed on Australian schools' failure to teach grammar as part of the primary curriculum.
The test for 11 and 12-year-olds assesses their reading, writing, and knowledge of language. They must also write two passages, answer questions after reading a short text, identify parts of sentences and correct spelling and punctuation errors.
Only a quarter of those who sat the test in New South Wales could spell "accommodation" correctly. A third knew the correct spelling of "scaly" and about half were correct with "razor" and "paid". About one in five students could correct the sentence: "Then Ron and me had lunch." Only 35 per cent were able to change "could of" to "could have".
Critics of the results said the abandonment of grammar from the curriculum had led to the poor literacy. A spokesman for the New South Wales education department said the results in general were "exceptionally good" and that the test questions were designed to test a range of abilities.
Overall results for reading, writing and language were the best since the test was introduced nine years ago. Those for language assessment were comparable to previous years.
The tests are marked out of 120 and the average score this year was 88.8 - the same as last year's average and almost equal to the top score of 88.9 in 2004.