Lincolnshire Partnership NHS Foundation Trust was criticised by the Care Quality Commission (CQC) in March 2015.
A re-inspection in April this year found it had made "positive progress" in some areas, but improvements were still needed.
The safety of patients at high risk of suicide had been deemed inadequate but has now been improved.
The trust currently has about 27,000 patients across the county and more than 2,000 members of staff.
Dr Paul Lelliott, deputy chief inspector of hospitals for the CQC, said there was now "good care" for the population served by the trust.
"We saw staff treating patients with kindness, dignity and respect," he said.
The use of volunteers and therapy dogs was praised, as was the patient-run cafÃ© and the range of paid job opportunities, including gardening and car valeting.
In March 2015 patients at risk of suicide were found not to be kept safe, but the trust said it now monitors "ligature risks", which are fixed points which someone could use to harm themselves.
"Heat maps" are also used to show patients at high risk of suicide.
Dr John Brewin, trust chief executive, said: "I am pleased that the work of all of our staff has been reflected.
"Our staff have a real focus on providing high-quality care for our patients and this latest report is testament to that commitment."
Improvements are needed in the areas of care plans, staff supervision, bed availability and delays in patients accessing psychological therapies, the CQC said.
The trust was also found to have good relationships with the community and police.

Ex-Leeds prop Bailey, 31, joined after the start of the season and made 15 appearances for Wire.
Forward Cox, 24, arrived on a one-year deal from Hull KR while Australian prop Dodds, 27, had an injury-hit season.
"I'd like to thank all three players for their contributions over the season," said head coach Tony Smith.

The 28-year-old footballer's contract was terminated hours after he was dropped for Saturday's Premier League match against Manchester United.
He will stand trial on Friday on two further counts of sexual activity with a child, which he denies.
Sportswear firm Adidas has cancelled its contract with the midfielder.
After Johnson's arrest in March 2015, the club suspended him, but then lifted the ban following talks with his representatives and the Professional Footballers' Association.
In his last appearance for the Black Cats, England international Johnson - who played while on bail - scored in a 2-2 draw against Liverpool at Anfield.
Johnson, who was born in Sunderland, began his career at Middlesbrough before moving to Manchester City and then to Sunderland for £10m in 2012.
When asked about the winger's future at a news conference earlier on Thursday, Sunderland manager Sam Allardyce said: "He'll not be available for this weekend. We will see how it goes after that."
The trial of Johnson, who has won 12 England caps, will take place at Bradford Crown Court and is expected to last two weeks.
An NHS mental health services provider has been upgraded from "inadequate" to "good" following a recent inspection.
[NEXT_CONCEPT]
Super League side Warrington Wolves have announced Ryan Bailey, Jordan Cox and Mitchell Dodds will leave at the end of their contracts.
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Adam Johnson has been sacked by Sunderland after pleading guilty to one count of sexual activity with a child and one charge of grooming.