Ashmore Park Nursery, Ashmore Park, was praised by Ofsted inspectors due to it giving children the "best start in life".
Inspector Dr Bogusia Matusiak-Varley visited the nursery earlier this year and praised it in all categories.
She found the school had "maintained the outstanding quality of education in the school" since its last inspection in 2015.
The report said: "From low starting points on entry, children make consistently strong progress and many exceed the expectations for their age in all areas of learning, especially in speaking, due to high-quality teaching over time.
"Teachers and early years educators are keen observers and follow children’s interest levels.
"For example, when children were studying the human body, they became fascinated with skulls.
"As a result, staff helped children to explore their learning by taking photographs of artificial skulls, and by encouraging them to handle and adorn them with bright-coloured beads to represent the many words that make up thoughts."
However, the inspector said there had been "missed opportunities" to identify the next step so parents can help their children learn at home.
The "innovative and extensive" curriculum were also praised by the inspector.
Headteacher Susan Lacey, her team, a governors at the school were praised for "making the nursery the hub of learning".
The inspection was undertaken on March 12.
Councillor Dr Michael Hardacre, Wolverhampton Council's cabinet member for education and skills, said: "I would like to congratulate Susan Lacey and her team on this wonderful report which is full of praise for the excellent work that everyone connected with Ashmore Park Nursery School are doing for their children.
“I would also like to congratulate the nursery on their willingness to assess good practice on an international basis, thus ensuring that they are not just outstanding in the eyes of Ofsted, but also following world-leading practice.”