It comes after a flood of racist abuse was directed at England footballers Bukayo Saka, Marcus Rashford and Jadon Sancho following the men's Euro 2020 final.
Instagram boss Adam Mosseri said content had "mistakenly" been identified as within guidelines instead of referred to human moderators.
The issue had now been fixed, he said.
“We have technology to try and prioritise reports and we were mistakenly marking some of these as benign comments, which they are absolutely not,” he told BBC News.
“The issue has since been addressed.