Oaks Court Care Home, in Oaks Crescent, Merridale, is run by Quality Care but a recent inspection by the Care Quality Commission found serious problems concerning the care of the elderly residents.
After being shown a draft of the inspectors' report, Wolverhampton Council ordered the closure of the home, and residents, several of whom have dementia, were moved to alternative homes last week.
Councillor Linda Leach, Wolverhampton Council's cabinet member for adult services, said: "This is not a decision we have taken lightly, but it is one that we believe to be necessary as a result of the concerns raised by the Care Quality Commission.
"Safeguarding is of course our top priority, and it is clear that the standard of care being provided at this particular home was not of the quality we would expect.
"The council has been working closely with staff, residents and their families throughout this process and we expect that all residents will have been moved to their new home by the end of the week."
She said the council acted quickly to put in additional support to ensure the safety and wellbeing of residents at the home. The council subsequently instigated its "provider failure process" to oversee an orderly closure of the home.
The CQC report has yet to be published but in September 2021 the commission published a report which found the home "required improvement".
That report stated: "People were not always safe as the infection prevention and control procedures were not effectively implemented. The provider did not have effective systems in place to identify environmental issues which could put people at the risk of harm.
"The physical environment did not support the needs of people living with dementia or those with sensory needs. People were not always treated in a respectful or dignified way. People were not always provided with information in a way they could understand."
Oaks Court House had 28 residents earlier this year but had the capacity to care for 41 people.
A member of staff, who wants to remain anonymous, told the Express & Star the last two weeks had been "upsetting".
They said: "This was distressing to staff and residents. The CQC could have could have taken a more gentle approach to work with the care home and the local authority to support the home.
"It wasn't a nice thing to see, when family had mainly positive views of the home and residents were happy and settled."
A spokesman for the CQC said: "The report has yet to be published. Providers are given a draft of CQC inspection reports prior to publication as part of our factual accuracy process."
Quality Care was unavailable to comment.