CROYDON College has "improved rapidly" since its last assessment, Ofsted has said.
The education watchdog has rated the college "good" overall, its second highest rating and one up from its "requires improvement" of January last year.
Inspectors who visited the college two months ago praised the teachers' "high aspirations" for their students, and said leaders had "transformed the learning environment within the college".
But inspectors said outcomes for learners were not yet good enough, noting that too few students got their qualifications.
The college, in Park Lane, has 3,459 full-time students and 7,505 part-time students, studying for a huge range of vocational and academic qualifications.
Lead inspector Richard Moore said: "Croydon College is a good college which makes a substantial difference to the lives of students of all ages within its local community. Students leave the college with a wide range of skills that enhance their personal lives and work readiness.
"However, although success rates have improved very significantly over the last two years, too few students to date achieve the qualifications for which they have studied.
"As a result, students' outcomes overall require improvement."
He added: "The college is very confident that its good teaching and learning, highly effective leadership and management and much improved in-year retention will lead to another significant increase in success rates at the end of the 2013/14 academic year."
Mr Moore said much of the improvement in performance over the previous two years was due to vocational courses, particularly health and social care and public services. He said success rates were low in A levels, a "much smaller" part of the curriculum, but changes this year were having a good effect.
Attendance rates were "satisfactory", he added, but the college recognised they were variable and needed improving.
He praised the college for its success in reducing the gap between students with learning needs and their peers, and for recruiting and keeping students previously getting free-school meals or looked-after children.
Mr Moore gave a "good" rating to all curriculum areas, but said more students needed to take part in external work placements, particularly those on business management and administration.
Praising "rapid and extensive improvements" in the quality of teaching, learning and assessment, he added: "Leaders and managers have focused relentlessly on supporting staff to develop their teaching skills and to improve lessons.
"The proportion of good lessons has increased significantly since the last inspection, so much so that inadequate teaching and learning are now rare.
"Outstanding teaching and learning are now much more prevalent across the college, although the college recognises the need to increase the proportion of outstanding lessons."
The college's principal and CEO, Frances Wadsworth, said she was pleased with the report, adding: "Every curriculum area inspected is judged to be 'good'.
"Ofsted has rightly reported that we have many outstanding teachers and high aspirations for our learners."