The horses' injuries were discovered by their shocked owners on Friday morning and are now being investigated by police.
One of the horses, aged 31, was in the stables during the attack while the other, aged five years old, was assaulted while grazing in the fields near its owner's house.
The family, who initially thought the horses had picked up their injuries from fighting each other, contacted their local vet to check on them after they saw bruising and a large black spot on their legs. After the wounds were examined they were told the animals had been sexually assaulted.
The owners are now warning other horse owners to be on their guard.
“There’s a maniac on the loose who is going round and doing sexual assaults on horses.“A vet came to visit on Friday and said their genital area had been sliced.
"According to our vet it’s the third similar incident that has happened in this area in the last two months.
“I have never heard of or seen anything like this before and I want to alert other horse owners to the fact this sort of thing is going on in Hyndburn.
“There are so many horses in this area that any one of them could fall victim to this.
“It’s just vicious and horrific, whoever has done it.”