It has been moved into Quadrant 1 - the top group - of the Youth Justice Oversight Framework and has been commended for the way it continually focuses on the needs of the children, families and the communities it serves.
The multi agency Youth Justice Service, formerly known as the Youth Offending Team, works with children aged 10 to 18 who are involved in the criminal justice system, from early stages of intervention in pre-court disposals to intensive orders and custodial sentences.
It also prepares reports that are used by the courts to help them sentence young people, and works with the victims of crime to, where possible, facilitate the process of mediation and to repair the harm caused.
In a letter to the City of Wolverhampton Council, Louise Wood, Director of Operations North, Youth Justice Board for England and Wales, said: "This change is in recognition of the strong performance your service has demonstrated, including decreasing first time entrants and custody rates, your proactive and committed Management Board and your inclusive approach and contributions to regional initiatives.
"The Youth Justice Board commends you on the way in which you continually focus on the needs of the children, families and the communities you serve."
Councillor Jacqui Coogan, Cabinet Member for Children, Young People and Education, said: "This is a really important endorsement by the Youth Justice Board of the excellent work which is being undertaken by our Youth Justice Service.
"It works hard to balance the wellbeing of young people who have offended with managing risk to the community. Central to its approach and intervention is the understanding of what the young people may have experienced in their lives, and a focus on trauma informed practice which balances the need to create boundaries for their behaviour with the need to prevent reoffending and the need to protect people from harm."
The Youth Justice Board for England and Wales has a statutory responsibility to oversee the operation of the youth justice system and a specific function to monitor its operation and the provision of youth justice services.
The Youth Justice Oversight Framework explains how this monitoring function is fulfilled and reinforces putting children at the heart of the system and achieving better outcomes for them.