Vulnerable children are benefitting from services at a council that four years ago "required improvement to be good", inspectors have said.
Ofsted has since rated children's services at Telford and Wrekin Council as "outstanding".
Its response to children facing risks was "very strong", Ofsted said.
The council is among bodies under scrutiny in an inquiry into child sexual exploitation (CSE) in Telford.
Shaun Davies, leader at the Labour-run council, said the "landmark" rating partly followed its investment of money raised through commercial enterprises, such as its solar farm, into services.
In 2016, Ofsted inspectors found "chronic risks" faced by children were not always identified or responded to quickly, while the views of children were recorded but "not always well used".
However, the latest inspection in January, praised its "high quality social work" and committed, "exceptionally well-trained" staff.
Senior leaders "have implemented a clear and ambitious vision for vulnerable children and families in Telford and Wrekin," it said.
"The response to children facing risks outside of the family is very strong and an area of excellent practice."
Lorna Fitzjohn, Ofsted's regional director for the West Midlands, said: "Children are listened to and their experiences are well understood and inform planning to improve their lives."
She added: "Children are cared for and they are cared about."
Mr Davies said the judgement put it in among the "top performing councils".
"I am very proud of all the staff who have worked so hard to achieve this," he added.
The independent CSE inquiry, commissioned by the council, aims to examine the "true extent" of the problem in the town following a newspaper claim up to 1,000 girls had been abused by gangs since the 1980s.
Inquiry chairman Tom Crowther QC has appealed for victims to come forward.
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