The son of a black father from Kenya and a white mother from Kansas, the Democratic senator from Illinois sealed his historic triumph by defeating Republican Sen. John McCain in a string of wins in hard-fought battleground states - Ohio, Florida, Virginia, Iowa and more.
You can see photos from Barack Obama's victory speech by Clicking Here.
On a night for Democrats to savor, they not only elected Obama the nation's 44th president but padded their majorities in the House and Senate, and come January will control both the White House and Congress for the first time since 1994.
CLICK HERE to watch Rick Williams' report from the Obama HQ in Chicago.
Obama's election capped a meteoric rise - from mere state senator to president-elect in four years.
In his first speech as victor, Obama catalogued the challenges ahead. "The greatest of a lifetime," he said, "two wars, a planet in peril, the worst financial crisis in a century."
He added, "There are many who won't agree with every decision or policy I make as president, and we know that government can't solve every problem. But I will always be honest with you about the challenges we face."
McCain called his former rival to concede defeat - and the end of his own 10-year quest for the White House. "The American people have spoken, and spoken clearly," McCain told disappointed supporters in Arizona. You can see John McCain's speech by Clicking Here.
CLICK HERE to watch Monica Malpass' report from the McCain HQ in Phoenix.
President Bush added his congratulations from the White House.
In his speech, Obama invoked the words of Lincoln and echoed John F. Kennedy.
"So let us summon a new spirit of patriotism, of service and responsibility where each of us resolves to pitch in and work harder," he said.
He and his running mate, Sen. Joseph Biden of Delaware, will take their oaths of office as president and vice president on Jan. 20, 2009.
Obama will move into the Oval Office as leader of a country that is almost certainly in recession, and fighting two long wars, one in Iraq, the other in Afghanistan.
The popular vote was close - 51.3 percent to 47.5 percent with 73 percent of all U.S. precincts counted - but not the count in the Electoral College, where it mattered most.
There, Obama's audacious decision to contest McCain in states that hadn't gone Democratic in years paid rich dividends.
Obama has said his first order of presidential business will be to tackle the economy. He has also pledged to withdraw most U.S. combat troops from Iraq within 16 months.