John Vine said the group, typically foreign students, is growing in number.
His report warned that immigration officers did not know how many of those told to leave the UK had actually left.
Immigration minister Damian Green blamed the last government - but Labour said the report was damning.
The latest report from the inspector focuses on a previously unknown problem in the UKBA, concerning people from outside Europe who have deadlines to leave the UK.
Many of these people are students and if they do not leave when told to do so, they are added to the "migration refusal pool" (MRP).
"There are over 150,000 cases nationally of migrants who have been refused an extension of stay in the UK," said Mr Vine.
"The Agency does not know how many of these individuals have left the country or are waiting to be removed.
"I also saw no evidence that there is a clear plan in place for the Agency to deal with this stream of work to ensure this does not become another backlog.
"I believe it can and must do more to demonstrate it is dealing with this issue in a more proactive manner."
The report said the number of MRP cases had grown from 153,000 in October of last year to almost 160,000 by mid-December.
Mr Vine said: "The Agency needs much more effective planning in place to deal with this stream of work in order to ensure it removes individuals still in the UK who have no right to be here, while setting out clear performance targets to manage these cases much more effectively."
Immigration Minister Damian Green said "Under the last government there was no effective strategy in place to ensure migrants left at the end of their time in the UK. The UK Border Agency is now working through a group of potential over-stayers to identify those who have not left.
"This includes checking passenger records using our e-borders database which now covers all flights outside Europe.
"This summer the UKBA launched a UK-wide operation to remove over-stayers and we have already seen 1,800 removals since the campaign started."
But shadow home secretary Yvette Cooper said the coalition was "failing on illegal immigration."
"The damning conclusion from the government's own immigration inspector has concluded that the government is giving a very low priority to finding and removing people who have been refused permission to stay.
"We've had the fiasco of the border scandal, where the Home Secretary has admitted she doesn't know how many people came in without checks. We now have huge queues at our airports because of poor management and the cuts to nearly 900 UK Border Force staff."
The UK Border Agency has no "clear strategy" for dealing with a group of more than 150,000 foreign nationals staying on after visas expire, the borders and immigration inspector says.