Llangedwyn School was inspected in January and judged good in both wellbeing and attitudes to learning, and care support and guidance.
Inspectors said the school is a "happy place where all pupils are valued and cared for".
Three other sections inspected, including standards, teaching and learning experiences, and leadership and management, were judged adequate and needs improvement.
Inspectors described the school as an "inclusive learning environment that successfully promotes Welsh heritage and culture."
It said "pupils are encouraged to take responsibility for their own learning and to play a full part in the life of the school," and that the school "provides a wealth of opportunities to enhance and enrich the pupils learning."
The report adds: "The recent period of instability in terms of leadership and staff changes has had a negative effect on the school’s life and work. In a short time, the acting headteacher has identified the need to improve aspects of teaching to raise standards. The governing body are very supportive of the school. However, in their role as critical friends, they do not sufficiently hold the school to account for pupil progress."
The chair of governors, Chris Richards said: "We welcome the report. It reflects the hard work put in by pupils, staff, parents, and the community to make this a great place to learn. We are looking forward to making it an even better school in the future."
ESTYN have provided several recommendations required to further improve provision.
They include the strengthening of approaches to teaching reading in foundation phase, ICT skills across the school, the development of challenge through the work delivered to pupils and by the Governing Body.
The school is now drawing up an action plan.
Acting executive head teacher, Catherine Hart said: "I am delighted that the inspection has identified the nurturing environment of our school and the quality of the learning opportunities available to the pupils. We are looking forward to working on our recommendations together, to keep moving forward."