Bracknell and Wokingham College was judged 'satisfactory' with many 'good' features in its latest inspection published last week, after being rated 'good' overall in its previous inspection in 2007.
Inspectors highlighted concerns about a drop in retention rates - the proportion of students completing courses - in 2010/11, but noted rates had improved 'significantly' in 2011/12 and are now satisfactory.
College principal Campbell Christie, who joined in September 2011, described it as a 'fair' report, adding: "Given that the achievement rates were always good and the retention rates have been demonstrably improved this year, I'm confident for the future."
Unlike sixth forms within schools, when further education colleges are assessed by Ofsted, retention rates contribute significantly towards the overall grading.
Mr Christie said the drop in retention rates was largely due to disruption moving to the new building and most students who left had gone into employment.
However, he said among students who stayed, A-level results were some of the best in the borough with 82% of grades A*-C, and many results higher than predicted when students joined.
Mr Christie said: "That to me is a mark of the committed staff and the quality of the teaching that goes on here."
When he took over last year, he said he wanted the college to have an 'outstanding' Ofsted ranking within five years.
The inspectors said that while teachers are "well-qualified and many have relevant and extensive vocational expertise which they share well with learners", more lessons need to be good or inspirational. Mr Christie said teachers are being encouraged to sit in on excellent lessons to learn further.
He also said a strategic plan to take the college up to 2015 was created in September, setting out its aims - including to be the best college in the Thames Valley - plus how they will be achieved and who is responsible for what.
As part of this, the college has introduced six-weekly monitoring reports to track attendance and achievement.
The inspectors, who visited in June, wrote: "The principal has set high expectations and a clear direction for the college. This has inspired staff to start to develop and improve the provision more effectively.
"They now have challenging targets and use data well to monitor progress. Retention rates, attendance and learners' behaviour have all improved noticeably in 2011/12."
* Ofsted inspection ratings are 'outstanding', 'good', 'satisfactory' and 'inadequate' but from September 'satisfactory' will be replaced by 'requires improvement', meaning more frequent inspections and improvement measures.
However, the new category will only be introduced to schools and colleges inspected after September.