Superior Court Judge Stephanie Sautner said the actress was doing well under strict new terms of her probation and urged her to keep up the good work.
The starlet has completed 12 days at the county morgue and five therapy sessions since Nov. 2, when she was sentenced to a strict routine of community service and counseling after her latest probation violation.
"You're doing well and I'd like to see it continue," Sautner said during a 10-minute status hearing.
She also offered Lohan an incentive to succeed, saying the actress could take leisure trips outside California after she completes a dozen days of morgue work a month.
The actress had permission from her probation officer to take a trip to Hawaii to celebrate her sister's birthday. She returned just hours before the hearing.
Lohan, 25, has drawn the repeated ire of judges for failing to complete counseling sessions and community service assignments on time. Sautner made clear Wednesday that she believes Lohan's new schedule - which requires the model and actress to appear in court monthly until March - is the reason for the turnaround.
The judge even hinted that Lohan might end her supervised probation early if she works harder.
"Do more days a month and we can end this in February, possibly," Sautner said.
The judge said Lohan should keep reporting to court in person to make sure she remains on track.
"I think she likes to come see me," Sautner joked. "I think that's her motivation."
Lohan appeared in court wearing brown slacks and a beige cardigan and found a smaller crowd of reporters than has chronicled the actress' court scoldings since she missed a hearing in May 2010.
The last time she appeared in court without a probation compliance issue on the agenda was February 2010.
Judges repeatedly sent her to jail and rehab since then, and Sautner said last month she was giving Lohan one final chance to end the court spectacle.
The actress remains on probation for a 2007 drunken driving case and a misdemeanor grand theft case filed after she took a $2,500 necklace without permission from a store.
Her appearance Wednesday came days before a Playboy issue featuring Lohan in a mostly nude pictorial hits newsstands.