Too many children are still starting school without the basic skills they need to learn, according to Ofsted's annual report.
It is a concern that more than a third (34%) of five-year-olds do not have good enough communication, language and literacy skills, inspectors said.
The report reveals that there has been some improvement in early years education since 2008 - the year that the last Labour government introduced a new curriculum for the under-fives.
Around 74% of nurseries and childminders are now considered good or better, compared to 65% three years ago, the report says.
But it also says that there has been little improvement in the last two years in the proportion of pre-school providers rated good or outstanding.
"This suggests that improvements brought about by the introduction of the Early Years Foundation Stage in 2008 may be levelling off," Ofsted said.
"Further improvement may only be possible through more radical reform of the way in which early years providers are regulated and inspected."
The annual report said that UK tests had shown that children from the poorest fifth of homes are, on average, 19 months behind children from the wealthiest families in their use of vocabulary by the time they are five.
"Too many children are still entering school without the basic skills they need to be ready to learn," it warns.
The report added: "It is a concern that 34% of children are not working securely in communication, language and literacy by the end of the Early Years Foundation Stage."
Childcare minister Elizabeth Truss said: "Ofsted's annual report confirms that, although there has been some progress in recent years, there is still a lot more to do to deliver the high quality early education all our children deserve."
Ministers will be setting out their plans for reform shortly, she added.Suggest a correction