Though Prime Minister Jose Luis Rodriguez Zapatero's ruling party won a majority of the seats in Parliament, it fell short of the 176 seats needed to rule without the support of others, El Pais reported online.
The conservative Popular Party came in second with 154 seats and its candidate, Mariano Rajoy, finished well behind Zapatero.
"The Spanish people have spoken clearly and have decided to open a new period without tension, without confrontation," Zapatero told a cheering audience in a victory speech in Madrid.
Chief among the re-elected prime minister's concerns will be the passing of an emergency stimulus package for Spain's once-robust, now-sagging economy.
Sunday's election was preceded by the death of 42-year-old Socialist councilor Isaias Carrasco in the Basque town of Arrasate.