Inspectors said they were impressed with a revamp in November 2017 of Liverpool's multi-agency safeguarding hub (Mash), which handles initial child protection concerns.
Children at risk of significant harm were found to be identified and supported swiftly by the Mash, with work backed by strong management oversight and prompt information sharing.
In addition, inspectors praised the council's Careline service, which operates 24 hours a day and ensures there is a consistent response to child protection concerns out of hours.
"Children at immediate risk of significant harm are identified swiftly, and action is taken to safeguard and protect them," states Ofsted's report following a visit in May this year.
"The vast majority of children in need of help and protection receive a proportionate response."
The Mash was also found to be effective in handling domestic abuse notifications from the police, which was among concerns raised by Ofsted in their single framework inspection in 2014.
"Screening of domestic abuse notifications by the police within the Mash has also improved since the last inspection. These notifications are triaged effectively to collate information and identify the level of priority," adds the inspectors' report.
However, Ofsted is concerned that there has not been similar progress across all children's services, which they have rated as "requires improvement" in terms of overall effectiveness, child protection, leadership and support for children in care and care leavers.
Inspectors found that it is taking too long to find adoptive families for looked-after children and too many care leavers are not in employment, education or training.
High caseloads among social workers is another concern raised by inspectors, particularly among those working with older children as this means they do not have enough time for independence planning.
"High caseloads have compromised the quality of social work practice," states Ofsted's inspection report.
"Due to capacity issues and delays in onward transfer of children's cases, some social work teams are carrying additional work. For example, the assessment teams are holding children's cases that should be with the permanence teams, so some children are not benefiting from the expertise and knowledge of permanence workers."
Inspectors do note though that the council is taking action to address high workload among social workers by developing a new recruitment and retention strategy and encouraging agency staff to take up permanent contracts.
"We are focusing very much on improving the support we provide to our social workers and we have already recruited new staff we are taking on to address the areas of most need," said Liverpool director of children's services Steve Reddy.
"We are also going to be concentrating on supporting young people in care into training and employment because the council - a big employer which has links to many other organisations - is in a good position to offer them the opportunities they need and deserve."
Barry Kushner, cabinet member for children's services, added: "Although we're improving, we know we've still got a way to go, but what's crucial is we know how we are going to get there and have plans in place to address every single area identified by Ofsted for further development.
"We are prioritising reducing caseloads by recruiting 16 extra staff."