Two inspectors spent several hours at the centre and visited two detainees who have reportedly been hospitalised after going on a hunger strike.
According to other asylum seekers, one of those men has not eaten for 40 days and is suffering from internal bleeding.
The inspectors say detainees are getting infections because their tents are wet, and there have been several suicide attempts and incidents of self-harm.
One of the inspectors, Dr Graham Thom, says overcrowding and a sense of hopelessness are contributing to physical and mental problems.
"These conditions are very cramped. We are talking about 14 people to a tent. In summer, in the heat, it's always hot," he said.
"It gets over 40 degrees during the day inside those tents and it was certainly very hot and humid when we were there."
Dr Thom says while a number of the detainees are developing skin conditions, he is most concerned about their mental health.
"In the front of their minds is the fact that they're not being processed, the uncertainty that's facing them is clearly having an impact on their mental health. We saw people who showed us scars where they had cut themselves," he said.
"They wanted to highlight one of the poles where somebody had tried to hang himself."
They say there are about almost 400 men, asylum seekers, living in tents. They say that some of those tents are wet inside. They say that some of the asylum seekers are suffering things like skin rashes and irritations and things like that.
I think the strongest message that Dr Graham Thom, who's led the inspection, came back with was overcrowding, but also concerns over the mental health of the inmates, if I can call them that.
They are clearly upset, he said, because they don't know what their future is, they don't know if they're ever going to be assessed.
Lots of them are under the impression that they were just unlucky, that there was a lottery and that they got chosen to come here.
He says that there's not enough by way of shower blocks and facilities, there's not enough mental health facilities to look after these people.
He described how one of here, or more of the detainees had shown him where they'd cut themselves, they showed him where somebody had on a pole tried to hang themselves.
He certainly wasn't happy with the situation and called on the Australian Government to make improvements.
The visit comes after 14 men appeared in court yesterday accused of rioting and causing damage to facilities at the detention centre in September.
Under Nauru's legal system, if a case is due for mention in court the defendant is only given representation by a paralegal.
This prompted a stand-off outside the court for a couple of hours when the 14 men protested that they were not being given proper legal representation.
Eventually, lawyer Pres-nines Ekwona, who had been retained by the Refugee Action Coalition, volunteered to represent the men.
The men have had their bail extended and the case is due before court again in December.