In the past three weeks alone, the number of people displaced inside Ukraine itself has doubled to at least 260,000, according to the UN’s Vincent Cochetel in Geneva.
Another 814,000 people have crossed the border into Russia this year, Vincent Cochetel says.
Pro-Russian rebels have been fighting Ukrainian forces since April.
Separatists in the eastern regions of Donetsk and Luhansk declared independence after Russia annexed Crimea from Ukraine.
Since the violence erupted, some 2,600 people have been killed and thousands more wounded.
The city of Luhansk has been under siege by government forces for the past month and is without proper supplies of food and water.
But the Ukrainian army has been forced to retreat as pro-Russian rebels gain ground, and said they had withdrawn from the city’s airport after coming under attack from “Russian tanks”.
Military spokesman Andriy Lysenko said sappers had blown up the airport’s runway so that it could not be used by rebel forces.
Rebels have also advanced in Donetsk region, around the city of Donetsk and further south near the port of Mariupol.
In early August, the UN refugee agency said 117,000 people were displaced in Ukraine but it now says that number has climbed dramatically, and could be even higher as many of those affected are unregistered and staying with family and friends.
The UN also says that there has been a decline in the use of humanitarian corridors set up by the Ukrainian authorities because of a series of fatal attacks on civilians.
In the past few days, an estimated 10,000 people have fled the southern port city of Mariupol since pro-Russian rebels captured areas close to the Russian border.
Russia denies Ukrainian and Western accusations that it is providing troops and equipment to the rebels.
It says 814,000 people have arrived from Ukraine this year under a visa-free regime.
Of these, 121,000 have applied for temporary asylum or refugee status. The UN says most Ukrainians in Russia are staying with relatives and friends or finding private accommodation.
UN High Commissioner for Refugees Antonio Guterres has warned that if the crisis is not stopped quickly “it will have not only devastating humanitarian consequences but it also has the potential to destabilize the whole region”.
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