More than 6% of young adults used a legal high known as "hippy crack" in the last year, according to the first figures to be published on its use in England and Wales.
Nitrous oxide, also known as laughing gas, is inhaled to make people feel euphoric and relaxed - but drug experts warn it can cause death on first time use through suffocation.
It was second only to cannabis in popularity among 16 to 24-year-olds, according to the 2012/13 Crime Survey for England and Wales.
Questions were added for the first time on the use of the drug, which is sometimes sold to recreational users in balloons, as well as herbal high salvia, also known as Mexican magic mint.
Some 6.1% of adults aged 16 to 24 - around 300,000 people - had taken nitrous oxide, while 1.1% had taken salvia in the last year.
But overall drug use in England and Wales is at the lowest level since records began, according to a Home Office report, with around 8.2% of 16 to 59-year-olds using an illicit drug in the last year, compared with 11.1% in 1996.
And the proportion of adults who took a class A drug has dropped from 3% in 2011/12 to 2.6%.
Crime Prevention Minister Jeremy Browne said: "Today's report shows drug usage in England and Wales is at its lowest level since records began."
A survey on attitudes also revealed that almost four out of five - or 79% - of respondents thought taking cannabis was unsafe.
Two-thirds thought it was never acceptable to take cannabis and the majority said it was unsafe to take heroin, cocaine or ecstasy.