The Armed Forces have made "very substantial improvements" in the training of recruits, a report says.
The ALI's first report was ordered after the deaths of four soldiers
The Adult Learning Inspectorate said there had been "something of a triumph" since its last report two years ago.
That investigation, ordered after four soldiers died at Deepcut Army barracks in Surrey, found widespread evidence of bullying and self-harm among recruits.
The ALI said such cases had been reduced but that more needed to be done to improve the complaints system.
The ALI's 2005 report was ordered by Armed Forces Minister Adam Ingram and blamed poor management for the suffering of new recruits.
Now it says improvements have been made in all aspects of training and welfare thanks to "focused effort and investment" by the Ministry of Defence and armed services.
Mr Ingram welcomed the report, saying it was testament to the forces' determination to change.
But Geoff Gray, father of Pte Gray who died at Deepcut in 2001, was critical, saying a panel of lay people should carry out regular inspections instead.
"The Army had to change, so why praise it for that?" he said.
The report said the main achievements so far had been in reducing cases of bullying, self-harm and suicide, as well as access to firearms and ammunition.
The use of inappropriate punishments by senior officers had also been cut, it said.
And across the board, the ALI said recruits were now supervised far more closely, particularly at night and at weekends, and that special care is given to recruits under the age of 18.
Chief inspector David Sherlock said: "Two years ago, the MoD and armed services had to face up to some harsh truths.
"Some tough messages have been taken on the chin and transformed into a determination to put things right.
"The events that triggered our involvement could not have been more serious. The armed services' response to them could not have been more decisive or proper.
"There should be no doubt whatsoever that (this report) describes something of a triumph of focused effort to resolve serious problems."
But the ALI concluded that more still needed to be done to guarantee the wellbeing of recruits.
It found that the implementation of policies and guidelines was inconsistent across different services, leading to wide variations in standards.
There was also very little systematic handover of command, meaning new commanding officers could come in with different priorities from their predecessors, halting or even reversing some of the improvements previously made.
And the report also said more effort was needed to improve the complaints system as there were still concerns among recruits over confidentiality and the risk of reprisals.
'Sense of failure'
Mr Sherlock said: "External criticism is always irksome. There were those who resisted my conclusions.
"But the sense of individual and corporate failure was sufficiently widespread and strong to be quickly transformed into a determination to put things right."
Mr Ingram said £73m had already been spent on the improvements, with a further £50m earmarked for the next four years.
"But money alone will not suffice," he added.
"We have completely overhauled our policies and training, notably for our Instructors, and Commanding Officers, to ensure that minimising the risks to trainees is core activity.
"I am genuinely heartened by the ALI's recognition of the scale of the achievement thus far and trust that the wider community will gain some reassurance of the scale and depth of our determination to succeed in this critical area."