The Care Inspectorate said Law Nursery School in Lawside Road had "not maintained" the standard identified at a previous inspection.
The inspectorate noted that efforts had been made to improve some areas of concern.
The nursery is registered to care for a maximum of 70 children.
The report followed an unannounced visit in December 2015 which graded three areas as "weak".
These were care and support, management and leadership, and staffing.
Quality of environment was rated as "adequate".
In their report, the inspectors said: "The service had not maintained the standard identified at the last inspection.
"Several management changes have taken place, and the current head teacher only commenced in post in late October 2015.
"There was an upheld complaint about the service in June 2015 in relation to staff's approach to supporting children."
The inspection found that the children were "not fully engaged" indoors, but were seen to be "very engaged" in their outdoor play.
The report stated: "The indoor environment for the pre-school children could be developed further to offer a more challenging learning environment and be better supported by staff to extend their learning.
"We observed several examples of staff engaging with children in a manner which we did not feel respected the children or positively engaged with them."
"More work is required in relation to creating a more positive ethos across the team and service, to impact positively on outcomes for children.
A Care Inspectorate spokesperson said: "We have clearly laid out in our inspection report the areas which require improvement at Law Nursery School.
"We will continue to work closely with this nursery to support that improvement, and ensure it is sustained."
A spokesman for Dundee City Council said: "The nursery school and the children and families service will be taking forward the recommendations contained in the report."
A Dundee nursery school rated "weak" by inspectors for the quality of its care, staffing and management has been told it must make improvements.