That means Irish Prime Minister Bertie Ahern, a member of the party, must form a coalition government with opponents who would like to see him lose power, the BBC reported.
Fianna Fail won 78 of the 166 seats, but saw a decline in the vote of its previous coalition partners, the Progressive Democrats. Sinn Fein won only four seats.
"We'll dust ourselves down. We're in this for the long haul. We would like to have done better but we did our best," said Gerry Adams, Sinn Fein's president.
After Thursday's vote, Ahern said government stability would be his top priority in forming a coalition government. Ahern has led a coalition government since 1997, a period that has seen strong economic growth in Ireland.
2014: The Year in Music [PHOTOS]