Democrats will hold on to the Senate seat in Colorado, avoiding another embarrassing defeat in a state that voted for President Obama in 2008.
Incumbent Sen. Michael Bennet will retain his seat, defeating conservative Ken Buck who had led in virtually all the polls leading up to the election, the Associated Press projected.
Bennet, who replaced Ken Salazar last year after Salazar was tapped for interior secretary, struggled to energize independents and Democrats that turned out in high numbers for then-candidate Obama in 2008.
At a time when discontent against Washington is high, Buck, a Tea Party favorite, attacked Bennet as a Washington insider closely aligned with President Obama's agenda.
Obama carried Colorado with 53 percent of the vote in 2008; fewer voters now -- 47 percent -- said they approved of the job he is doing as president.
Democrats will retain control of the Senate, and in one of the few major victories for the party, Sen. Harry Reid will continue in his position as majority leader. But Democrats face an uphill battle as they try to advance their agenda.
One key race has yet to be called. In Washington, three-term Democratic incumbent Patty Murray faces a close race against Republican Dino Rossi.
Republicans didn't win in enough blue states to gain control of the Senate, but with the House now under GOP control and Republicans gaining a much stronger foothold in the Senate, Democrats will have to retool their agenda, especially on issues such as energy and jobs, where the two parties have failed to come to a consensus.
Republicans were quick to paint Tuesday night's results as a referendum on President Obama's policies.
"We're determined to stop the agenda Americans have rejected," Senate Minority Leader Mitch McConnell said in a press conference with members of the Republican leadership. "We will work with the administration when they agree with the people and confront them when they don't."
"I think what our friends on the other side learned is that choosing the president over your constituents is not a good strategy," he said. "Ignoring the voters and their wishes, as you could see during the entire two-year period, produces predictable results."
The president today urged both parties to work together on issues of concern to the American people.
"I'm not going to pretend this is going to be easy," he said. "What I think the American people are expecting and what we owe them is to focus on those jobs that affect their jobs."
"I do believe there is hope for progress," he added.
In a signal of how important it will be for Democrats to reach across the aisle, the White House is working on a plan for a retreat with GOP and Democratic leaders of the House and Senate.
There had been little bipartisan cooperation in the Senate in the past year.
Not one Republican voted for the health care bill, the flagship legislation of the president and congressional Democrats. Today, McConnell called it "a metaphor of government excess."
The two parties couldn't find middle ground on other important legislation, either, particularly on energy and immigration.
This is the first time since 1930 that one chamber of Congress has changed hands without the other.
Although Reid emerged victorious from a tough battle and will continue his tenure in the Senate, he is poised to lead a Senate that will be very different.
For Reid, who has been in public office for 40 years, the race against Tea Party favorite Sharron Angle, once a virtual unknown, was a tough one.
Fifty-five percent of Nevada voters in preliminary exit poll results said they disapproved of the job he is doing in the Senate, and 56 percent said they thought the Senate majority leader had been in Washington too long.
At the same time, he won support on other grounds. A narrow majority of voters, 52 percent, said they preferred an insider who knew how to get things done over an outsider "who wants to shake things up." And when it came to picking the one candidate quality that mattered most to them, Nevada's voters were divided: 31 percent said they wanted change, but 29 percent said they were looking for someone who understood their needs, and nearly as many were looking for experience.
The economy was a major factor in Americans' decision to go to the polls.
The election also became a referendum on Washington, as Democratic incumbents faced significant losses. Sen. Russ Feingold, D-Wis., and Sen. Blanche Lincoln of Arkansas, became casualties of that sentiment, suffering losses at the hands of their Republican counterparts.
The last time a Republican held the Senate seat occupied by Lincoln in Arkansas was 1879.
The GOP scored a key victory in another Democratic stronghold, North Dakota, where Gov. John Hoeven will become the first GOP senator from the state in 24 years. The Republican will replace retiring Sen. Byron Dorgan, a moderate Democrat who retired after occupying the seat for 18 years. Republicans also gained a heavily-prized seat in the state of Pennsylvania as more Democratic incumbents fell prey to voter discontent.
Tea Party Strength Tested in Mid-term Elections
The Tea Party scored major victories in an election dominated by the country's economic woes. Republican Marco Rubio won the Senate race in Florida by a wide margin, as did Rand Paul in Kentucky.
In Indiana, Tea Party favorite Dan Coats defeated Democrat Rep. Brad Ellsworth in a race to replace retiring Democratic Sen. Evan Bayh, and incumbent Sen. Jim DeMint won another term in South Carolina.
"Tonight, there's a Tea Party tidal wave and we're sending a message to" lawmakers in Washington, Paul said in his victory speech Tuesday night. "It's a message on fiscal sanity. It's a message on limited constitutional government and balanced budgets."
Two of the most high-profile races of the election season, however, appeared to be less favorable for the Tea Party.
Republican Christine O' Donnell, who received the most news coverage of the 2010 candidates, lost to Democrat Chris Coons in Delaware.
In New York, another controversial race dominated by scandals, Tea Party-backed Carl Paladino also lost, to Democratic Attorney General Andrew Cuomo.
Exit polls showed strong discontent against Obama in red states and even a surprising amount in his home state of Illinois, where 48 percent disapproved of the president's performance, compared with 51 percent who approved of him. Voters have been hard hit by the economy, with four in 10 saying someone in their household had lost a job or been laid off in the past two years, higher than the three in 10 nationally who said the same.
In Kentucky, 52 percent of voters said Paul's views were too extreme, but the libertarian-leaning ophthalmologist rode a wave of strong anti-President Obama sentiment in the state. By a 23-point margin, voters there said they were casting their ballots in opposition to Obama, with 62 percent disapproving of Obama's job performance overall, according to ABC News exit polls.
The sentiment was similar in West Virginia, despite a Senate victory for Democratic Gov. Joe Manchin. The state has voted Republican in the last three presidential elections. Seven in 10 disapproved of Obama's job performance, with approval at 30 percent. Nearly half of West Virginia voters said their vote was to express opposition to Obama, while far fewer -- 14 percent -- said they voted to express support for the president.
Exit poll results also underscored the economic distress defining the 2010 election. Eighty-eight percent of voters said the national economy's in bad shape, nearly as many as the record 92 percent who said so two years ago. Only 14 percent said their own family's financial situation has improved since 2008.
"Will the president take a lesson away from tonight?" House Tea Party caucus founder Michele Bachmann asked Tuesday on ABC News Now. "This is a profound repudiation of his policies."
ABC News' Gary Langer contributed to this report.