Loxley Hall in Stafford Road, Uttoxeter, has been in federation with Cicely Haughton in Wetley Rocks from May 1.
Both schools share a governing body and executive head, but will maintain their own budgets, characteristics and will be individually inspected by Ofsted.
The federation process began with having meetings with both of the schools' governing bodies in September 2011.
Things started coming together fully in September 2012 and both schools consulted with stakeholders.
Executive headteacher of both school Richard Redgate said: "We've always had a close relationship as the only two special schools offering residential education in Staffordshire for key stage one to four pupils with social, emotional and behavioural difficulties (SEBD).
"The big advantage of the whole thing is that we already have models of provision for children who need either day or residential support, or both, in place.
"There has always been a transition between the two schools, with key stage two pupils from Cicely Haughton moving on to Loxley Hall to do key stage three and four, now we're part of the same federation it's made that more seamless, which in turn is better for the children.
"The ethos of both school is about trying to raise the children's self esteem, and our motto is 'building relationships, celebrating success and promoting change'."
Both schools work with children with SEBD, but many of the pupils also have additional needs, learning difficulties and disabilities such as Autism Spectrum Disorder (ASD) Attention Deficit Hyperactivity Disorder (ADHD).
The schools provide an environment where the children can be re-engaged into education by better being able to work with their individual needs with smaller classes, trained staff, and a more diverse curriculum, providing opportunities for them to gain success, confidence and hopefully make changes to their lives.
Cicely Haughton caters for younger pupils - key stage one and two - and has extensive grounds and a lot of enrichment activities and facilities such as a BMX track, 5-a-side artificial football pitch and a pirate boat play area and gardens where the children can play outside safely and a lot of the curriculum can be altered to outside working.
Loxley Hall also has extensive grounds in the countryside and additional needs unit for more difficult young people.
Mr Redgate added: "A lot of young people coming to Cicely Haughton and Loxley Hall have had a fairly negative experience of the education system.
"Both school environments are more nurturing because there are smaller classes and staff can spend more time with the children and address their individual needs.
"It's about building a positive relationship with the young people who've often experienced negative relationships with adults.
"Loxley Hall has a high instance of children in care, 25 per cent of the schools pupils.
"Most are children whose emotional needs haven't been met and often their behaviours manifest themselves from these difficulties."
The objectives of the federation will help both school is to: *Draw on the strengths of one another and bring them together *They are all age SEBD strategic residential vision and model taking into account local and national agendas.
*Shared focus in raising standards to improve the quality of teaching and learning and residential care.
*Enable better continuity for young people across both schools in terms of transition.
*Strengthen the standing of the SEBD community within Staffordshire's multi-agency framework, to attract extended provision into the schools.
Mr Redgate said: "The main thing is they are both Outstanding Ofsted schools; each has systems and processes that can be joined together so the best practice can be achieved from both schools to bring them together and improve them.
"We've already done a lot of work across the residential provision in terms of care plans and both schools' heads of care have inspected other schools; the whole concept is about joining the strengths of the schools.
"The time was right, Mr Phillips retired as head of Cicely Haughton and I happened to be in the right place at the right time in terms of my knowledge of both schools.
"This opportunity has arisen from having two very strong senior leadership and staff teams within both schools so that operationally their day to day running hasn't been affected by me becoming executive headteacher of both."