California's graduation rate was at 76.3 percent, up 1.5 percent from 2010. The dropout rate was 14.4 percent, down by 2.2 percent from 2010.
The biggest gains were seen in Hispanic, black and English learner students.
The Los Angeles Unified School District, the state's largest, posted a 4.2 percent drop in its dropout rate, to 20.6 percent, and less than 1 percent decline in its graduation rate, to 61.6 percent.
"It's going in the right direction, but it's not where we want it to be," said Superintendent of Public Instruction Tom Torlakson Thursday. "We want to be at 85-90 percent."
Asian students posted the top graduation rate with 90 percent, while black students fared the least well, with 63 percent.
English learners reported the biggest gains - 3.8 percent more graduated, while 4 percent fewer dropped out.
Hispanic students scored a 2.2 percent jump in graduation and 3 percent fewer left school, while 2.3 percent more black students earned a diploma and 2 percent fewer dropped out.
The difference between graduation and dropout rates is students who are taking longer than four years to earn a diploma, special education students, and students working on equivalency diplomas.
Results for Hispanic, black, English learner and poor students were higher than the overall average, which showed that progress was being made in closing the so-called "achievement gap" in which Asian and white students consistently outperform their counterparts from other ethnic groups, Torlakson said.
The dropout numbers are only for high school students. Education officials said a significant number of middle school students never make it to high school, but they do not have those figures.
The Associated Press contributed to this report.