In a 139-page report, the New York-based watchdog group said many of the underage workers began in the fields when they were 8 to 13 years old.
It said children must use machetes to cut sugarcane and strip leaves from the stalks, often resulting in injury, and that the work often keeps children from attending the first few months of school.
The director of social welfare at El Salvador's Labor Ministry, Walter Palacios, acknowledged that children were working in the sugar harvest, but said his agency was fighting the problem.
Palacios said a study by an industry-linked foundation early last year found 4,753 children working in cane fields, but he said the government had created special education programs for farm children to compensate for lost school time.
He also said the government was aiding farm families so that they would not need to put their children to work harvesting sugar and that the industry was working to halt the use of child labor.
The report said companies are "using the product of child labor that is both hazardous and widespread."
Michael Bochenek, counsel to the Children's Rights Division of Human Rights Watch, called on such companies, singling out Coca-Cola, to make sure they weren't contributing to the problem.
"If Coca-Cola is serious about avoiding complicity in the use of hazardous child labor, the company should recognize its responsibility to ensure that respect for human rights extends beyond its direct suppliers," he said.
In a statement, Coca-Cola responded that it "does not condone the use of child labor" and it had ensured that its direct suppliers were not employing children.
The company said problems involve family-owned sugar cooperatives that supply sugar to mills and refineries, and it was working with suppliers to stamp out the problem.
Coca-Cola said the Human Rights Watch investigation had prompted the Salvadoran sugar industry association to demand "zero tolerance of child labor" at cooperatives and to increase monitoring both in the fields and in mills, while working to increase educational opportunities for children.