Inspectors have classed Oxfordshire's library service as fair, with good prospects for improvement.
County council managers said they were pleased with the Audit Commission verdict, and they were determined to put in the further hard work needed to make sure the service improved.
The county council employs about 225 full and part-time library staff who work in 43 libraries, and seven mobile libraries.
Cutbacks led to a reduction in opening hours in the 1990s but these have now been restored.
Neil Fawcett, executive member for learning and culture, said: "We're all very happy with the important decision to give us 'likely to improve status' and we're now determined to do all we can to bring those improvements to library users across the county.
"There are several initiatives to improve our libraries, with the programme to install broadband technology and many more computers being the main one.
"This will bring high speed, free and secure Internet access to all our libraries.
"Other improvements planned for next year will enable users to consult the catalogue, make requests and renew their books via the Internet.
"We're also in the process of making sure that more copies of the most popular books are bought, that customer and information services are improved and that libraries have more attractive layouts.
"This is all being achieved from existing budgets, which is good news for council tax payers.
"We have also pledged to increase opening hours later next year."
The report came as the council's executive board prepared to discuss the relocation of Abingdon's library from The Charter, in the town centre, to the former Old Gaol sports centre in Bridge Street.
The council wants to double the size of Abingdon Library, and the move would allow this to take place.
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