France's defence minister earlier called on international forces deployed in the Christian-majority country to put an end to attacks by the militias "by force if needed".
Amnesty said it had documented at least 200 killings of Muslim civilians by Christian militia groups known as the anti-balaka, set up in the wake of the March 2013 coup by the mainly-Muslim Seleka rebellion.
"Ethnic cleansing' of Muslims has been carried out in the western part of the Central African Republic, the most populous part of the country, since early January 2014," Amnesty International said in a report.
"Entire Muslim communities have been forced to flee, and hundreds of Muslim civilians who have not managed to escape have been killed by the loosely organised militias known as anti-balaka."
The group said attacks against Muslims had been committed "with the stated intent to forcibly displace these communities from the country," with many anti-balaka fighters viewing Muslims as "'foreigners' who should leave the country or be killed".
"They appear to be achieving their aims, with Muslims being forced out of the country in increasingly large numbers," it said.
The impoverished country descended into chaos last March after the rebellion overthrew the government, sparking deadly violence that has uprooted a million people out of a population of 4.6 million.
Atrocities, the fear of attacks and a lack of food have displaced a quarter of the country's population, while the United Nations and relief agencies estimate that at least two million people need humanitarian assistance.
The landlocked country has been prone to coups, rebellions and mutinies for decades, but the explosion in interreligious violence is unprecedented.
Amnesty urged international peacekeeping forces in the country to "take rapid steps to break anti-balaka control over the country's road network, and to station sufficient troops in towns where Muslims are threatened".
It called for international troops to be granted the necessary resources to achieve this, warning of a "tragedy of historic proportions" that could set a precedent for other countries in the region struggling with sectarian or ethnic conflict.
There are currently 5,300 African Union troops operating under a UN mandate in the former French colony, and the force is expected to reach 6,000 by March.
France has deployed 1,600 troops, while the EU has promised to deploy 500 troops at the beginning of March and the United States is providing logistical support.
France's defence minister Jean-Yves Le Drian said last week that while the presence of French troops had brought back some stability to the capital Bangui, it had not done so for the rest of the country.
During a visit Tuesday to Brazzaville in Congo, Le Drian said that "all militias who continue to be involved in mob violence and commit murder must stop".
French troops and the African Union-led support mission in CAR must "implement the UN resolutions, by force if needed", he added.
Congolese President Denis Sassou Nguesso, who is a mediator in the conflict, said for his part: "It is the duty of the international community to act with more firmness and diligence to end the reign of barbarism."
In New York, UN chief Ban Ki-Moon told reporters: "The sectarian brutality is changing the country's demography. The de facto partition of the C.A.R. is a distinct risk."
He added: "The international response does not yet match the gravity of the situation.
"We must do more to prevent more atrocities, protect civilians, restore law and order, provide humanitarian assistance and hold the country together."
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