Sterling has scored four goals in his last four Premier League games, eight in total this season, and is joint top in terms of assists with six, having emerged as one of City's most influential performers.
But Guardiola is convinced England winger Sterling, 23, has more in his locker and can take his game to another level with some improvements.
“He can do better. We are so delighted in what he has done in three years, but he can do better - be more consistent, first controls, his receptions, many, many things.
“I said many times we are delighted, but he can do better."