Some children have been plied with drugs or alcohol and trafficked around Northern Ireland in taxis for sexual exploitation, senior police said.
A total of 22 suspected victims have been identified and more than 30 people arrested as part of a major investigation into potential organised crime.
Assistant chief constable Mark Hamilton said: "We see children who are taken to parties and who are offered drugs for free, and then at some point have to pay that back through sexual acts."
A senior detective revealed up to fifty suspects have been identified and arrests made in each case.
A number of individuals have been charged, some with non-sexual offences such as drug crimes.
Most of those targeted lived in residential care homes at the time of incidents but the allegations relate to periods when they were not in the facilities, such as on nights-out when they failed to return.
Some suspected victims went missing 137 times from January 2011 to last summer, when a wide-ranging police investigation was launched, Mr Hamilton said.
Boys and girls have allegedly both been targeted.
Mr Hamilton added: "Many children are offered friendship, care, love and presents and accept drugs. Some are then threatened and it can be a progressive set of criminality."
He told Stormont assembly members: "We have some evidence of children being put in taxis and sent to another town for the purposes of attending a party or meeting other people. That has the hallmarks of trafficking."
In some cases, the internet has made children more accessible to predators.
The PSNI is engaging in broader analysis.
"We are now looking at today's offences and bringing in a new approach to child sexual exploitation," the senior officer added.
Members of Greater Manchester Police have been drafted in to provide advice.
Sexual exploitation in itself is not a criminal offence, unlike grooming or assaults. It is an umbrella term for this kind of behaviour.
Mr Hamilton said: "We are starting to look for groups or associations of people who are involved in combined offending. I am not saying that those (sex) rings don't exist, we are out looking."
The problem is complicated by the fact that often victims do not recognise themselves as victims.
Most of the suspects are not registered sex offenders and the senior officer said public protection arrangements had not been lacking.
Mr Hamilton added: "We are determined to take a far more aggressive stance against those offences.
"What is very clear is that the victims of those crimes are very vulnerable people, in some cases with complex needs, and therefore require a complex and sophisticated approach and response from the police service."
Social workers and a representative from children's charity Barnardos are assisting the team of PSNI detectives handling the cases.
Stormont health minister Edwin Poots said: "Children are not brought into care on the basis that they have done wrong, they are not guilty of anything, they are not locked up, more often than not they are the wronged party."
Justice minister David Ford said: "It is an appalling crime and any child in this situation can be at risk."
Earlier, PSNI Detective Superintendent Sean Wright, who revealed that up to 50 arrests have been made, said: "We haven't identified a sex ring, but we are looking for it."
The officer added: "We have looked to see if there are links and connections across. We can see, for example, that many of the children know each other, we can see that some of the suspects know each other.
"What we are trying to now understand is what or how significant those links are, how organised this may or may not be, and through those investigations to try and understand what degree of organisation is in place by these perpetrators to groom and exploit young people.
"We haven't uncovered any sex ring, I want to be absolutely clear about that, we have no evidence of it, but we are looking."
Mr Wright said the investigation was "complicated" by the alleged victims' attitudes to the police efforts.
He said the "vast majority" did not view themselves as victims.
"Where a victim doesn't see themselves as a victim, they tend not to co-operate with the police, social services or any of the other statutory services who want to bring these perpetrators to justice," said Mr Wright.
"Victims will tell us that the person who had sex with them, or took them to a party and gave them drink and drugs and encouraged them to perform sexual acts on their friends, is actually their boyfriend and they love them very dearly.
"So there is no way on this earth that they are going to give us a statement to put their boyfriend in jail.
"Please do not underestimate the complexity of this."
The National Society for the Prevention of Cruelty to Children said the investigation was the "largest case of child sexual exploitation" it had encountered in Northern Ireland.
The NSPCC has set up a dedicated helpline for those impacted by the investigation.
Neil Anderson, NSPCC Northern Ireland head of service, said:
"As the details of this investigation begin to unfold, I want to stress NSPCC's commitment to working closely with other safeguarding and child protection agencies to ensure a co-ordinated response to the support of victims."
He added: "The common factor seen in children who become victims of sexual exploitation is their vulnerability. Abusers take advantage of an imbalance of power, grooming children for sexual exploitation and abuse through varying degrees and stages of enticement, coercion, intimidation and violence.
"The early focus of this investigation in Northern Ireland has been on children in care but it is important to remember that vulnerable children from all backgrounds and all walks of life can become victims of sexual exploitation.
"One of the main learning points from investigations of child sexual exploitation in England is that measuring the full size and scale of the issue is very difficult. For Northern Ireland, our concern is that we may only be seeing the first signs of a bigger problem.
"The harsh reality is that Northern Ireland is not immune to sexual exploitation of children such as that so widely reported in connection with recent court cases in Rochdale and Oxford. This is a sharp reminder that every one of us has to remain vigilant and when we have concerns about a child, we have to speak out."
The dedicated NSPCC helpline can be reached on 0800 389 1701.
Mr Anderson explained: "The helpline, operated by the NSPCC, is staffed by professional, trained and experienced child protection practitioners. Our staff will provide 24 hour advice and support to callers so that protective action can be taken to safeguard children and young people. Callers to the helpline can remain anonymous."