Education watchdog Ofsted has rated Durham County Council's children's services as "good" in an impressive turnaround from two previous critical inspections.
Inspectors have praised leadership as "outstanding" with "continually improving service delivery".
The services were rated as requiring improvement after inspections in 2016 and 2019.
But the council since made "swift and purposeful responses" and "improved and expanded services to children", making great progress and turning weaknesses into strengths, says the latest report.
Ofsted inspectors said leaders' impact on social work with children and families was outstanding, with all other areas rated good.
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The report says: "Leaders in Durham have an acute knowledge of the needs of children in Durham.
"They have identified the highest areas of need and demand and have built effective and responsive services around them.
"Highly innovative specialist teams are providing very high quality support for the most vulnerable children.
"Core social work practice in the majority of service areas is effective, reducing children’s needs and risks and improving their lived experiences."
It says children and families make "sustainable progress" from the council's approach.
The ratings follow a three-week inspection by a team looking at all children's social care services in May.
Inspectors said Durham had "a confident and stable senior leadership team" with high ambitions and "a relentless focus and deliberate drive to working longer and more intensively with families", making sure children's voices are "influencing key strategies".
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The report says: "Leaders intelligently recognise and understand the needs of Durham children and build supportive services around them.
"Leaders and managers at all levels continually strive for excellent social work practice and are not complacent."
It says there is significant investment and enhancement to services, under the scrutiny of "highly attentive and keenly involved" leaders "continually focused on improving the lives of children and families".
Inspectors said leaders had ambitious strategies, quickly tackled challenges and analysed risks and strengths, leading to well-informed decisions.
They said children needing help and protection and their families got "sensitive and proportionate early help support" and built "trusting and enduring relationships" with social workers.
They found safeguarding concerns got prompt and effective responses, with assessments described as "detailed and analytical", effective support of homeless children, "robust and helpful" support plans and appropriate responses to risks.
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Children at risk of exploitation are appropriately identified, says the report.
But responses to missing children are "not always consistently robust", with their circumstances and risks unclear, due to rising demand.
Inspectors found children in care were well supported by committed social workers who built trusting and understanding relationships: "Children in care live in caring homes where they make progess and their circumstances improve.
"Children speak highly about their social workers and feel listened to and well supported."
It says children and families are "at the centre of decision-making and planning".
The fostering service has been strengthened with "rigorous" recruitment and assessment, while care leavers have better experiences and feel cared for, with a hub created as a base for young people making them feel "immensely valued and supported".
Criticisms included some "less well considered" responses leading to a very small number of children being placed with emergency foster carers at weekends, too many disabled children waiting too long for some services and more support needed for some care leavers.
A small number of children with complex needs are placed outside the county or in residential homes because of "a lack of choice and availability of local specialist homes" amid increasing demand, but the report says leaders are working hard to tackle this.
Cllr Ted Henderson, cabinet member for children and young people’s services, said: “We are extremely pleased to have been given a good rating by the Ofsted inspection team, and are thrilled with the positive feedback they have provided about our services.
“The report not only recognises the quality of the services we provide, but also recognises our work to build around the needs of children and their families.
“The good rating is a fantastic reflection of the incredibly hard work that goes on across our children’s services and I would like to thank all our staff across the service for their ongoing hard work and commitment.
“We recognise that there is always more to do and are ambitious for the future. We are committed to delivering the very best services for all our children and young people.”
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