Bachmann took 4,823 of the 16,892 votes cast Saturday on the Iowa State University campus to 4,671 for Paul, CBS News reported.
"In Iowa, we are social conservatives and we will never be ashamed of being social conservatives," said Bachmann, an Iowa native.
Tim Pawlenty, a former Minnesota governor, took third place with 2,293 votes. Former Sen. Rick Santorum of Pennsylvania received 1,657 votes, followed by Herman Cain with 1,456. Write-in candidate Rick Perry, who formally entered the race Saturday in South Carolina, got 718 votes, followed by front-runner Mitt Romney (5670, Newt Gingrich (385), Jon Huntsman (68) and Thaddeas McCotter (35).
"Congratulations to Congresswoman Michele Bachmann for her victory in today's straw poll," Pawlenty said after the announcement. "We made progress in moving from the back of the pack into a competitive position for the caucuses, but we have a lot more work to do. This is a long process to restore America -- we are just beginning and I'm looking forward to a great campaign."
Pawlenty, who invested more time and money in Iowa than his rivals, had been prepared to pack it in if he didn't do well, The Hill reported, saying Friday he would have to "reassess" his decision to run if he did poorly.
"We may not have any choice, if it went that way," he told reporters at an Iowa breakfast sponsored by Politico.
The straw poll tends to be a measure of the quality of a candidate's ground operation in Iowa. Supporters were lured to Ames with food and in Bachmann's case performances by country singers, The Des Moines Register reported.
Perry, Romney and Huntsman didn't make a push in Iowa.