The school's headmaster said the "growing expense and luxury" forced on parents was also a major concern.
Beaulieu Convent School in Jersey also referred to "worries about alcohol and drug consumption" at the end of Year 11 event for pupils aged 15-16.
A former pupil said the prom was an important milestone and accused the school of overreacting.
Chris Beirne, headmaster, said the "significant focus and distraction" caused by the prom "does not fit into the ethos of our school".
Writing to parents Mr Beirne cited a letter from an unnamed colleague who was convinced the preparations and the event were "not positive, constructive or healthy experiences".
The colleague wrote: "The financial strain and the inevitable competition associated with this is another very unwelcome, and sometimes crushing, aspect for many parents."
The letter from the colleague also referred to "alcohol and drug consumption at after-parties" as "a considerable concern".
It said the strain of trying "to be slim, fashionable, have perfect skin" led to "unacceptable pressure".
Mr Beirne said he could no longer "safely manage the risk" associated with the event.
The independent Catholic school said it would continue to offer Year 13 leavers a celebratory mass with their families followed by a drinks reception at the school.
The Â£5,400-a-year convent has around 760 students aged 4-18.
Former pupil Hannah Hosegood, 20, said her prom was "a first taste of maturity" and the school should tackle individual pupils if they had concerns about drugs or alcohol.
She said: "It's really upsetting knowing those girls won't be able to experience an event you spend a fair amount of time looking forward to and remember for the rest of your life."
A girls' school has scrapped its end of year prom claiming it is too much of a "distraction" to pupils.