Inspectors visited the school at the end of October and the beginning of November and found that on the whole the school was responding well but there remained areas of concern.
The sixth form examinations from this year showed most students exceeded or achieved their expected levels.
The report noted that "this reverses a three-year trend of decline and underachievement."
The inspectors also noted the quality of teaching had improved significantly but it had not yet impacted on the levels of achievement because of past weaknesses.
But the report noted the levels of teaching differed between subjects and that behaviour in some lessons by a minority of pupils was "unacceptable".
Headteacher Rachel Totton was pleased with the report and promised that the progress and hard work would continue.
"Staff are working exceptionally hard, with students, to achieve the best possible standards in all areas of the college and the report recognises this," said Ms Totton.
"The college fully understands there are still areas in need of improvement and we will not let up on the drive to get these right.
"I hope everyone can help us both to celebrate what is improving and to keep a clear and determined focus on the remaining issues to be addressed."
County councillor John Watson, executive member for children and young people's service, said: "We are pleased to see that Whitby Community College is on track to be removed from special measures and it is gratifying to read the positive comments.
"The authority will continue to work with the college to remedy the issues identified by Ofsted in this report."