Sen. Hillary Clinton has narrowly won the New Hampshire primary, becoming the first woman -- and the first-ever former first lady -- to win the first-in-the-nation contest.
Clinton beat out Sen. Barack Obama, who, riding a wave of momentum from his Iowa caucus victory, battled for a close second place in the Granite State.
Never thought to be a major factor in New Hampshire, former North Carolina Sen. John Edwards came in a distant third in the state and will now focus his limited resources on South Carolina, where he won in 2004.
After a devastating third place finish in Iowa, the narrow victory in New Hampshire allows Clinton to claim a comeback of sorts, a narrative that fits well with her husband's surprise 1992 finish in New Hampshire that led to his nickname "The Comeback Kid."
The tight race has also secured Obama as a formidable opponent for Clinton, setting up what may become a bloody political battle between the two Democratic rivals going into the big-state primaries Feb. 5.
"I come tonight with a full heart," Clinton told a crowd of supporters in Manchester. "Over the last week, I have listened to you, and in the process I found my own voice.
"Together let's give America the kind of comeback that New Hampshire has just given me," Clinton said, as supporters chanted "Comeback Kid!"
"We're going to take what we learned here in New Hampshire and make our case," she said. "We are in it for the long run!"
Over the course of 24 hours, the Clinton campaign has gone from despair and bitterness to euphoria, buoyed by victory in New Hampshire.
"We're back," Clinton pollster Mark Penn told ABC News.
Looking tired and disappointed, Obama conceded victory to Clinton, speaking to a crowd of supporters who were yelling, "We want change!"
"You can be the new majority who can lead this nation out of a long political darkness -- Democrats, Independents and Republicans who are tired of the division and distraction that has clouded Washington," Obama said.
"If we mobilize our voices to challenge the money and influence that's stood in our way and challenge ourselves to reach for something better, there's no problem we can't solve -- no destiny we cannot fulfill," he said.
Both Obama and Edwards called Clinton Tuesday night to congratulate her.
Introducing her husband at a rally in Manchester, Elizabeth Edwards said, "The goal is still in sight."
Conceding defeat in the Granite State, Edwards congratulated both Obama and Clinton but vowed to continue his campaign.
"Two races down, 48 states left to go," Edwards said before a crowd of supporters.
Long before the final count came in for the Democratic primary in New Hampshire, New Mexico Gov. Bill Richardson took to the stage at his rally in Manchester admitting defeat for a second time but refusing to bring his campaign to an end.
"We head out west and the fight goes on," Richardson told the cheering crowd of about 150 supporters.
Hours before her victory in New Hampshire, Clinton made a major shake up in the top echelons of her campaign.
Maggie Williams, Clinton's former chief of staff from her days as first lady, was tapped to take the reins of the campaign and will be in charge of day-to-day operations.
"Maggie brings a comfort level," a Clinton campaign source told ABC News' Kate Snow. "She is a woman. She's a minority. She can talk the talk, and she understands the field operations."
Exit poll results suggested Clinton's candidacy resonated with women, especially older women.
Clinton's campaign inspired a gender gap in New Hampshire, with Clinton winning by 9 points among women voters, while Obama won men by a wide 42-30 percent margin.
Among women ages 65 and over, Clinton won 57 percent to Obama's 27 percent. In comparison, Clinton and Obama tied at 39 percent among men 65 and over.
The economy was the single biggest issue to voters, and that worked for Clinton as well. Among those who called it their top concern, she beat Obama by 9 points, 44-35 percent.
Meanwhile, Obama won the message game. Exit poll results indicate 55 percent of Democratic primary voters said they're most interested in a candidate who can bring about needed change.
Only about two in 10 say they care most about experience -- the message most touted during the campaign by Clinton.
In recent days, the New York senator had begun to retool her appeal to voters, lessening her emphasis on experience and raising questions about Obama's ability to bring about the change he promises.
Meanwhile, one quarter of the Democratic primary voters polls said Clinton "ran the most unfair campaign," while one in 10 thought it was Obama, and another one in 10 pointed the finger at Edwards.
Clinton won mainline Democrats, by 45-34 percent; Obama won independents by a wider 45-30 percent. Independents accounted for just over four in 10 New Hampshire voters, down from 48 percent in the last primary in 2004, and a high of 50 percent in 1992.
Obama pounded the pavement early Tuesday, bringing doughnuts to polling sites, shaking hands and urging New Hampshire voters to the polls.
"Today you can make your voice heard, you can insist that change will come," Obama said at a campaign rally at Dartmouth College in New Hampshire Tuesday morning. "The American people have decided for the first time in a very long time to cast aside cynicism, to cast aside fear, to cast aside doubts."
The senator from New York, who banked on New Hampshire acting as a "firewall" against an Obama surge, began the day with a difficult morning.
As the senator greeted supporters outside a polling station in Nashua, she was dissed by Edwards supporters, who yelled, "Hey, hey, ho, ho. Status quo has got to go!"
When she extended a hand to an Edwards supporter, he refused to shake the former first lady's hand. She patted him on the shoulder and moved on.
At another stop in Derry, a woman holding a Mitt Romney sign heckled Clinton outside a polling site, yelling at her to move her campaign bus.
"Voters can't get in because your bus is in the way," the woman said. Clinton said she'd have it moved.
The slights appeared to roll of Clinton's back, who became emotional yesterday when a woman asked he how she was coping in such a grueling campaign.
ABC News estimated record turnout in the New Hampshire primaries, driven by record turnout on the Democratic side.
Estimated turnout on the Democrat side is 28 percent of the eligible voting population, and on the Republican side, it's 23 percent, which means that overall turnout is estimated at about half of eligible voters.
Turnout was particularly high in Portsmouth and Keene -- both of which are overwhelmingly Democratic.
In a northern hamlet of the state, voters of Dixville Notch and Hart's Location cast the first 46 ballots of the primary season, giving wins to Obama on the Democratic side and Sen. John McCain of Arizona for the Republicans -- both considered candidates popular with the state's independent voters.
Brimming with confidence in New Hampshire after his Iowa caucus win just five days earlier, Obama drew the venom of Clinton and her husband, former President Bill Clinton, who have begun to publicly vent frustration at what they view as the media's soft treatment of Obama.
At one of his final campaign appearances, the former president, whose finish in the 1992 New Hampshire primary made him the "Comeback Kid," lashed out at Obama, calling his candidacy "the biggest fairy tale I've ever seen."
"It is wrong that Sen. Obama got to go through 15 debates trumpeting his superior judgment and how he had been against the war in every year, enumerating the years and never got asked one time -- not once, 'Well, how could you say that when you said in 2004 you didn't know how you would have voted on the resolution?'" Clinton said, suggesting that Obama had a muddled 2004 calling into question Obama's early position on the Iraq War.
"I understand he's feeling a little frustrated right now," Obama said Tuesday, noting he expects more attacks. "I don't think it will be just in the next few days," Obama said. "I think it'll be, you know, until I'm the nominee or until I quit."
Arguing her two Democratic rivals have formed "kinda a buddy system," Clinton told ABC News' Diane Sawyer on "Good Morning America" that Obama and Edwards have been given a "free ride" from the media.
"You know for both Sens. Edwards and Obama, they've been given pretty much a free ride and that's fine," Clinton said. "I don't mind having to get up there and take all the scrutiny. But at some point the free ride ends, maybe it ends now, maybe it ends in a month maybe it ends in the general election. You cannot be elected president if you do not withstand the tough questions."
But the attacks didn't appear to dent Obama's stride.
The Illinois senator got some comic relief on the campaign trail when Seinfeld co-creator and comedian Larry David accompanied his growing entourage.
When a Dartmouth student collapsed at a rally at Dartmouth College Tuesday, David cupped his hand to his mouth and called out to Obama: "Sinatra had this effect on a crowd."
"That's right, Larry," Obama said.
In Kogelo, the western Kenyan village of Barack Obama's father, the senator's distant relatives listened to the radio Tuesday for news of how Obama would do in the New Hampshire primary.
All of the Democratic candidates poured resources into the Granite State.
Clinton spent the most in the state on television advertising -- $5.4 million, to Obama's $5 million, according to TNS Media Intelligence.cmag, a firm that tracks political advertising. Reflecting a much smaller treasure chest, Edwards spent $1.7 million and New Mexico Gov. Bill Richardson, the fourth candidate in the race, spent about $500,000.
But in the end, it was Clinton who beat out her Democratic rivals, securing her position as a leading Democratic presidential candidate.
ABC News' John Donvan, Kate Snow, Sarah Amos, Raelyn Johnson, Sunlen Miller and Gary Langer contributed to this report.