The Liberal Jewish Synagogue Nursery School has been upgraded from "good" to "outstanding" in its latest Ofsted inspection.
Inspectors, who dropped in unannounced on the nursery - which is situated inside the liberal synagogue in St John's Wood - in July, marked it as "outstanding" in all areas.
They said that "the staff and management team focus significantly well on their work with children" and "an excellent commitment to accurate self-evaluation results in staff implementing highly effective action plans across the nursery".
Other areas they commended were the staff's relationship with parents, and the safety of all its pupils.
Chairman of the LJS Nursery committee Barbara Fidler celebrated the report as "a wonderful tribute to our superb headteacher, Caroline Villiers".
Ms Villiers founded the nursery, which currently has 31 children on its roll call, 11 years ago, with the aim of welcoming pupils of all faiths while maintaining its "Progressive Jewish ethos".