Officers received a report of an unlicensed music event taking place on Portsdown Hill at 10.40pm on Saturday.
Witnesses reported parents dropping off the children to attend the illegal event, according to a Facebook post from Fareham police.
The post said: ‘After speaking to people who have been enjoying the stunning views of the Solent and Portsmouth, it has become clear that parents were also observed taking and dropping off their children to this so-called “rave”.
‘Parents, do you actually know what you have taken your children to?
‘These events are not just a group of people dancing to music in a field...there are people there, taking advantage of your children and profiting off the misery that is drug misuse.
‘There was numerous amounts of evidence of drug Misuse and nitrous oxide abuse.’
The littering of metallic nitrous oxide canisters - used to administer the gas as a form of psychoactive high – has become a persistent and widespread problem across Portsmouth, as The News reported last month.
Police are warning that illegal drugs are often mixed with ‘deadly substances’.
The post added: ‘Drugs are often cut with deadly substances such as rat poison and cement powder as well as talcum powder, laxatives and caffeine to name a few.
A spokeswoman from Hampshire Constabulary confirmed that enquiries are ongoing and officers are liaising with councils.