The report, "African Horse Sickness - Impact on the UK Horse Industry", assesses the potential costs of an outbreak of the disease on British shores.
Outbreaks occurred twice in Europe during the 20th century, the most recent in Spain in 1990.
The report was commissioned by a government and industry group - the African Horse Sickness Working Group. It was founded and is led by Buckinghamshire charity The Horse Trust.
The report's authors believe the disease could wipe out at least half the country's equine industry.
It is a highly fatal and infectious disease, which affects horses, mules and donkeys. The disease is transmitted via Culicoides midges, also responsible for infecting cows and sheep with the Bluetongue virus.
African Horse Sickness kills up to 90 per cent of the horses it infects and is endemic in sub-Saharan Africa. There is growing concern, with global warming, that AHS may reach Britain - as Bluetongue has done.
The report says: "In the event of widespread disease, the introduction of movement restrictions within protection zones around disease outbreaks could have a potentially devastating effect.
"It is estimated that over half the economic impact of the sector could be wiped out in one to two years, with irreparable damage caused to racing and major setbacks to the various sporting disciplines such as three day eventing, show jumping and dressage."
The report says the equine industry has an estimated total economic impact of more than £7 billion and provides an estimated 70,000 full time jobs. In addition, it would affect the 4.3 million horse riders in Britain.
"This report underlines the potentially devastating effect AHS could have on the UK horse industry," said Paul Jepson, chief executive and veterinary director of The Horse Trust, who chairs the AHS Working Group.
"It is critically important that an incursion of the disease is recognised immediately so that the control measures can be put in place to limit its spread.
"This report underlines the importance of the new African Horse Sickness Regulations, which are due to go before parliament next year. These regulations will empower the government to take the necessary steps to control AHS, if it reaches the UK," Jepson said.
The current official risk of the disease entering Britain is low, according to the report. However, the official risk of Bluetongue entering the country was also categorised as low, before it reached British shores.
The report, put together by researchers from the University of Reading, said that if only isolated cases of AHS reached Britain and are successfully restricted by control measures or unfavourable climatic conditions, "it is feasible that the economic and social effect on the British horse industry will be minimal".