Not enough local authorities challenge schools with poor results, behaviour or truancy problems until it is too late, says Estyn.
In a report launched this week, the Welsh inspectorate criticised some councils for not using their full powers to tackle underperforming schools until after a bad inspection report had been published.
Estyn called for earlier intervention in struggling schools and said problems, such as unruly pupils, should be investigated by inclusion and school support services.
Over the past four years, inspectors have identified more than 50 schools that need to improve. Four of them were found to be worse upon reinspection.
It can take as long as two years for schools to improve enough to be removed from the list of those causing concern, Estyn said. And governors need to hold leaders, managers and teachers to account more, it said.
The inspectorate called on the Assembly government to issue guidance and provide more training for local authorities and governors on how to use their powers of intervention.
Dr Bill Maxwell, Wales's chief inspector, said: "We now know that most local authorities support schools very well when identified by Estyn as causing concern. But the real challenge for them is to use their full range of powers to improve these schools before they are inspected by Estyn."
Councils do not have to wait until after an inspection to challenge a school. If necessary, they can appoint extra governors, issue warning notices to schools and even replace the governing body.
The Welsh Local Government Association were unable to respond to the report's criticisms before TES Cymru went to press.