Fewer schools in England are being judged outstanding compared with recent years and more are being rated as weak.
Ministers say urgent reforms are needed because almost half of schools are satisfactory or inadequate.
Figures released by Ofsted show that 11% of schools checked since last September were rated outstanding, while 9% were not up to scratch.
In the year 2006-07, 14% of those checked were outstanding and 6% were "inadequate".
Ofsted said a good proportion of schools had improved since they were last checked.
A new inspection regime came in last autumn.
This puts more emphasis on classroom observation, pupil attainment and views of parents and pupils.
The new figures show that of 3,990 school inspections carried out from September 2009 to March 2010, the proportion of schools judged to be outstanding was 11%.
This is a slight improvement on the autumn term inspections alone, when 9% were rated outstanding.
Five per cent were given "notice to improve" and four per cent were put in "special measures".
A total of 42% were judged to be good and 38% satisfactory.
Minister for schools Lord Hill said: "With almost half of schools inspected since September judged as only satisfactory or inadequate, it's clear there is urgent need for real reform.
"We need to create more excellent schools and drive up standards across the board - and that's exactly what our academy proposals will help to do."
The new government has announced that the best schools will face fewer routine inspections and that Ofsted will focus more on the weakest schools.
Of those schools checked since September, more than a quarter (28%) had improved their grade, Ofsted said, including 40% of schools previously graded satisfactory.
Nearly half (48%) of the schools inspected kept the same grade as their previous inspection, while nearly a quarter (24%) went down.
Ofsted's Chief inspector Christine Gilbert said: "Greater involvement for senior staff in the inspection process and more inspection time in the classroom means that the new framework is helping ensure schools are better able to understand their weaknesses and areas in need of development.
"It is particularly pleasing to see that 11% of schools considered to be serving areas of high deprivation have been graded outstanding in the last term, matching the overall national figure for schools."
Ofsted believes it is natural for there to be a higher proportion of schools in the inadequate category in the early stages of a new inspection regime.
It has said this happened with the last set of big changes in 2005.
School leaders say standards are continuing to rise and that changes to the system and the criteria used by Ofsted mean year-to-year comparisons of inspections are misleading.
John Dunford, general secretary of the Association of School and College Leaders (ASCL), said schools now had to do "even more" to be rated outstanding.
"Ofsted has made no secret that it has raised the bar for schools being inspected under the new framework which came into effect last September," he said.
"The fact that there are three per cent fewer schools rated as outstanding does not mean school standards have fallen, but rather that Ofsted is using different criteria to judge those schools.
"Some schools will not be able to achieve an outstanding grade, regardless of good they are, purely because of the criteria imposed."
Christine Blower, general secretary of the National Union of Teachers, said Ofsted's goal posts had been moved and schools were "caught between the devil and the deep blue sea".
"Lord Hill's claim that the recent school inspection figures show that the government is right to continue with the Academies programme is entirely misleading," she said.
"The figures clearly show that less than half the Academies inspected since September have themselves been judged to be outstanding or good.
"Yet again we see false claims being made about the effectiveness of the programme. Quite simply Academy status is not the best route to school improvement."