With 88 percent of precincts reporting, Daniels led Democrat Long Thompson 58 percent to 40 percent, CNN said.
In his victory speech, Daniels made a call for change, going into his second term, the (Anderson, Ind.) Herald Bulletin reported.
"This is less an endorsement than an instruction, this is less a victory than an assignment," Daniels said. "And what the people of Indiana have said is that they want us to press forward with change and improvement and reform to make education better, taxpayers better protected and make this the great state it can be."
Daniels had a significant fundraising advantage.
In her concession speech, Thompson said her candidacy has "put a big crack in that glass ceiling.''