Following a monitoring inspection of provision at Rotherham Council inspectors praised a re-organisation of children's services to create multi-disciplinary teams.
Early support for families and assessments of risk were faster, and information sharing was stronger under this partnership set up, said the inspection team.
Inspectors also found improvements in the quality of children's plans as well as managers' supervision of staff and oversight of their work.
Recruitment and retention rates among social workers had also improved, and are now better than the national average, said Ofsted.
"Due to a positive organisational culture, staff are highly committed and motivated and they report feeling valued," inspectors said in a letter outlining their findings.
Ofsted also noted that the co-location of multi-agency professionals had improved understanding of each others' work and broken down communication barriers.
"Staff within the locality teams are working well together," the letter states.
"This follows a period of team development that included activities to help them to learn about each other's range of skills and ways in which they could network to provide enhanced support to children and their families."
Despite their praise inspectors also noted a number of areas where further improvement is needed. Team managers need to strengthen how they record their supervision of staff to ensure it is more reflective and helps future decision-making.
An "overuse of jargon" by management when instructing social workers, was also called into question.
Concerns were also raised by inspectors that police interviews with children were being carried out without social workers present.
"Consequently, more than one agency is questioning the same child separately. Thus, the child has to tell their story more than once," said the inspection team.
Ian Thomas, Rotherham's director of children services, said: "To be told you have a positive organisational culture is something which you just can't buy and certainly two years ago we would never have believed we would be hearing.
"We see a positive culture here every day but to have it played back to you in such a way as in an Ofsted report is amazing and something we are immensely proud about. Here in Rotherham we have some of the most loyal, dedicated and highly motivated staff I have ever seen.
"It is like everyone has the same goal - to turn the ship around and make Rotherham the best it can be and put the past firmly in the past."
Ofsted's first monitoring visit to the council, in October last year, backed senior management's commitment to improving performance but said further work was needed to improve the quality of social work.
Rotherham was rated "inadequate" in October 2014 following concerns about historic instances of child sexual exploitation highlighted in a report by Professor Alexis Jay in August of that year.