Rick Santorum will place third and Ron Paul will be fourth first-in-the-South contest.
Propelled by voters who were heavily influenced by the pre-primary debates, and a strong evangelical showing, Gingrich claimed a landslide victory, winning virtually every county in the Palmetto State save for a handful that went to Romney.
"It's not that I am a good debater," Gingrich said in his victory speech tonight, surrounded by his family and an enthusiastic crowd of supporters. "It's that I articulate the deepest-felt values of the American people."
Praising all three of his rivals, Gingrich, who made more than $3 million in 2010, per his tax return, repeatedly berated Washington and New York "elites."
In his concession speech, Romney congratulated the former House speaker but not without some underhanded jabs.
"When my opponents attack success and free enterprise they are not only attacking me, they are attacking every person who dreams of a better person. He's attacking you, I will support you I will help you have a better future," Romney said, hinting at a new line of attack that the campaign is likely to adopt going into Florida.
While Gingrich was never mentioned after Romney's opening line, a good chunk of his speech referred to the former speaker.
"The Republican Party doesn't demonize prosperity. We celebrate success in our party," he said. "And let me be clear, if Republican leaders want to join this president in demonizing success and disparaging conservative values, then they're not going to be fit to be our nominee."
The enthusiastic crowd chanted "We Need Mitt! We Need Mitt!" as he spoke.
Even though they trailed far behind the top contenders, the bottom two candidates showed no sign of dropping out.
"This is the beginning of a long hard slog," Texas Rep. Ron Paul said to cheers.
Santorum categorized the race as being "wide open." "Join the fight," he said to applause.
Gingrich trailed Romney by double digits just days ago. But that changed quickly after Gingrich's performance in Thursday's night CNN Southern Republican debate. The former House speaker was able to turn his biggest liability -- accusations by his second wife, Marianne, that he wanted an "open marriage" -- into an asset, drawing two standing ovations for assailing the media for bringing up the allegations.
The debate performance, in which Romney struggled to answer questions about his tax returns, injected fresh momentum into a campaign that, up until earlier this week, was overshadowed by Romney. Nearly two-thirds of Republican voters today cited debate performance as at least a somewhat important factor in their vote and they favored Gingrich over Romney by a vast 50-22 percent, per exit poll results.
The late surge worked in Gingrich's favor. More than half of South Carolina voters decided whom to support in the past few days, according to exit polls, more than in either Iowa or New Hampshire and a much larger number than in 2008. Those voters went overwhelmingly for Gingrich by 44-22 percent.
Gingrich's win today is a significant blow to Romney, who lost two races this week. Santorum was declared the winner in Iowa after a voting error had initially handed that title to Romney.
The former governor poured more money than any other candidate into South Carolina, outspending Gingrich $1.9 million to $640,000. The two candidates' super PACs spent roughly the same amount -- nearly $3 million each -- in the Palmetto state on ads and mailers. But Romney was unable to sustain his lead.
Romney has struggled to maintain his initial front-runner status amid his reluctance to reveal his tax records, despite calls by even his surrogates urging him to do so. The controversy over Romney's experience at Bain & Co. also hurt him in the Palmetto State. Twenty-eight percent of voters saw it as a negative, a substantial number, especially when looking at the lower-income voters, among whom Romney got virtually no support.
Romney, 64, has said he will release his tax records in April despite calls from his rivals to do so immediately. Gingrich, 68, released his Thursday. The former governor, however, revealed that he paid a 15-percent effective tax rate in 2010, which is considerably lower than other Americans with comparable wealth. The lower tax rate was, in part, because Romney makes much of his money through investments and speaking fees rather than employment.
South Carolina is an important race in the Republican primaries. No candidate has ever won the GOP nomination for president without winning South Carolina since 1980, when it became home to the nation's first-in-the-South primary.
The evangelical vote was crucial in today's primary, more so than in Iowa and New Hampshire. Sixty-five percent of GOP voters in South Carolina today were evangelical Christians, compared with 57 percent in Iowa and 22 percent in New Hampshire. Thirty-six percent of the South Carolina Republican electorate also described themselves as "very" conservative and voted mostly for Gingrich.
As in Iowa and New Hampshire, the candidate attribute that voters were most concerned about was who could defeat President Obama in November, and even these voters favored Gingrich over Romney.
Concerns about the economy ran deep in South Carolina, where the unemployment rate is above the national average. An overwhelming 79 percent of voters said they were "very" worried about the direction of the economy.
The South Carolina Republican Party predicted a higher-than-normal turnout in today's primary. Turnout appeared to be mixed and varied throughout the state. It was, however, particularly heavy in Greenville, South Carolina's most populous county that has a history of favoring socially conservative candidates and voted in favor of Gingrich today. In 2008, Romney received only 17 percent of the votes in Greenville, a county that Mike Huckabee carried.
With Gingrich, Santorum and Romney all claiming a lead in one early state, analysts say the race is wide open.
The next Republican contest is in Florida, Jan. 31, where Romney has already poured millions of dollars on television advertising and on-the-ground efforts.
ABC News Emily Friedman, Gary Langer and Elizabeth Hartfield contributed to this report.