Menendez defeated Thomas Kean Jr., a state senator and son of a popular former governor, by about 10 points. He did significantly better than most polls had predicted.
Many of the polls during the campaign suggested that President George W. Bush was a major drag on Kean, with voters saying they supported Menendez because he is a Democrat.
The result means that Democrats continue to hold both New Jersey Senate seats, as they have for more than 30 years.
Menendez, the son of Cuban immigrants, began his political career in Union City as a protege of the longtime mayor, William Musto. He gained a reputation as a reformer when he testified for the prosecution at Musto's federal corruption trial in 1981.
After serving as mayor and state legislator, Menendez was elected to Congress in 1992 and remained there until Gov. Jon Corzine appointed him to the Senate.