Freedom House Europe Director Roland Kovats called the decision part of the "deplorable crackdown on independent civil society organizations by the Kremlin."
Kovats called the International Youth Human Rights Movement one of the most active human rights organizations in Russia.
The group is accused of failing to submit its annual report to the Nizhniy Novgorod branch of the Federal Registration Service (FRS).
The group says it re-registered at the central branch of the FRS in Moscow.
YHRM’s coordinator of legal programs, Dimitry Makarov, said the incident highlights the incompetence of the authorities.
According to Freedom House, under Russia’s new law governing nongovernmental organizations, failing to file periodic reports is grounds for the courts to declare an organization "inactive" and strip it of its legal status.
The law came into effect on April 18 and regulates more than 500,000 NGOs in Russia.