A total of 26.4 million people were internally displaced at the end of 2011, a fall from 27.5 million the previous year, according to the Internal Displacement Monitoring Centre (IDMC).
But the number of newly-displaced people, including 830,000 who fled during the Arab uprisings, rose 20 percent compared to 2010.
In Libya, 500,000 fled their homes to other areas during the conflict which led the overthrow of Muammar Gaddafi, the IDMC said.
The crackdown on protesters forced 156,000 people to flee their homes in Syria, and 175,000 in Yemen, it added.
In Afghanistan, the number of new displacements rocketed 80 percent as fighting spread to new regions.
In Somalia, "famine and conflict added to the already extreme vulnerabilities of millions of displaced people”, said the IDMC.
Internally displaced people (IDPs) are identified as those who have been forced to flee within the borders of their country by conflict. Unlike refugees, they have no legal status.
Colombia is the country with the highest number of IDPs, at between 3.9 and 5.3 million; government and other observer groups' figures vary.
Iraq is second with between 2.3 and 2.6 million, followed by Sudan which has 2.2 million IDPs.
"While the Arab Spring uprisings caused significant surges in internal displacement, events in other regions such as the spread of armed conflict in Afghanistan and the activities of drug cartels and paramilitary gangs in Colombia all added to this figure," said IDMC head Kate Halff.