The Welsh Ambulance service has been given six months to turn itself around and reach performance targets.
It follows a review of the service for the Welsh Assembly Government which found evidence of a "bullying culture" and poor morale amongst staff.
Health minister Edwina Hart noted overall performance improvements but said response times were "far from acceptable" in many areas.
The trust said more needed to be done but it was putting plans into place.
Ms Hart highlighted concerns over use of rapid response vehicles and where patients had been left waiting for a vehicle to transport them to hospital.
She said while satisfied there was progress and improvements by the trust, "response times in many areas of Wales are far from acceptable."
"I expect to see demonstrable improvement within the next six months, particularly in rural Wales, where too many people are still waiting too long for a response from the emergency ambulance service."
She said she was particularly concerned about services in Powys, where performance was "unacceptable" and where there was "considerable public concern" over resources and staff vacancies.
Ms Hart said she was also "extremely concerned" with the review's findings about the ambulance service's culture.
"The report highlights that the number and speed of changes has had a serious adverse effect on staff morale, and that there are issues of poor people management and perceptions of a bullying culture."
The ambulance trust's chief executive Alan Murray said the trust accepted despite improvements there was "much work still to be done."
Mr Murray added: "We welcome the review's reaffirmation that we are in the early stages of a long and complex modernisation programme; that, as the Auditor General put it, we need time to make a difference."
He said a "concentrated effort" was required to improve staff morale and the relationship between staff and local managers.
Mike Ponton, director of the Welsh NHS Confederation, said the trust has shown "leadership and direction" to improve services and to deal with the "legacy of the past".
He said: "Change is often uncomfortable and it requires everyone involved to help make things better.
"The trust now needs to be given time, stability and funding from the minister to meet the challenging targets that have now been set."
Ms Hart ordered the review in November 2007, which was led by Stuart Fletcher, chair of the Welsh Ambulance NHS Trust.
It followed a critical report by the Wales Audit Office, which found that a lack of direction and leadership had led to poor performance.
There have been problems at the trust since 2006, with senior managers admitting the service was in crisis and the assembly government ordering an inquiry.