PM Pedro Sánchez told supporters "the future has won and the past has lost"
Spain's governing Socialists have claimed victory in the country's third election in four years, but have fallen short of a majority.
PM Pedro Sánchez's party polled 29% and will need the help of either left-wing Podemos and regional parties, or the centre right, to form a government.
For the first time since military rule ended in the 1970s, a far-right party is set to enter parliament.
Vox opposes multiculturalism, feminism and unrestricted migration.
The other big story of the election was the collapse in support for the Popular Party (PP), which governed Spain until it was dumped from power in May 2018 in a no-confidence vote.
In its worst election ever, the PP won just 66 seats, down from 137 in the previous parliament.
In his victory speech, Mr Sánchez said the party's big challenges were to fight inequality, advance co-existence and halt corruption.
"The future has won and the past has lost," he told cheering supporters. During his time in office he has raised the minimum wage, appointed a female-dominated cabinet and promised to bring in laws defining rape as sex without clear consent.
The Socialists won 123 seats while their former coalition partner, Podemos, won 42.
The result is a personal success for the prime minister, who increased his party's share from 23% of the vote in 2016.
But it still leaves the Socialists and Podemos 11 seats short of the necessary 176 for a majority.
Mr Sánchez could make up the numbers with smaller regional parties, including Basque nationalists, but he is likely to need the help of Catalan pro-independence parties, which withdrew their support for his government last month, forcing the election.
The centre-left Catalan ERC was the big winner in Catalonia, with a projected 15 seats. Its leader, Oriol Junqueras, is in jail facing trial for his role in declaring independence in October 2017 and tweeted thanks for the million votes his party received.
The PP's historic defeat means that, even with the support of centre-right Ciudadanos (Citizens) and Vox, it has no chance of forming a coalition, and leader Pablo Casado said it would become the main opposition force.
Vox won more than 10% of the vote, which gives it 24 seats in the 350-seat parliament.
Turnout was 75.8%, the biggest for several years and 9% higher than the previous election in 2016.
What the leaders said
Pedro Sánchez, Socialists: "We have sent a clear and powerful message from the people of Spain to Europe and the world, that it is possible to beat reactionaries and authoritarianism and regression."
Pablo Casado, PP: "The result has been very bad… because the centre-right vote has fragmented, that vote has become a very difficult vote to win."
Albert Rivera, Ciudadanos: "We accept that others have won the election... sooner rather than later we will govern Spain."
Pablo Iglesias, Podemos: "I have told [Sánchez]... of our willingness to work towards a coalition government."
Santiago Abascal, Vox: "We told you that we were starting a reconquest of Spain and that is exactly what we have done... and we can clearly say to all of Spain that Vox is here to stay."
Who are Vox?
Led by Santiago Abascal, a former member of the conservative PP, the party has emerged in a matter of months with a vow to "make Spain great again".
It won seats for the first time in local elections in the southern Andalusia region, and agreed to support a centre-right coalition of the PP and Ciudadanos.
Vox rejects the far-right label but its views on immigration and Islam place it in line with far-right and populist parties elsewhere in Europe.
It wants to repeal laws against gender violence, and opposes abortion and same-sex marriage. Critics see it as a nationalist throwback to fascist dictator Francisco Franco, who ruled Spain until his death in 1975.
Vox aims to deport migrants legally entitled to be in Spain if they have committed an offence, and wants to prevent any migrant who comes in illegally from staying.
Can Sánchez form a government?
He can choose either to look to the left or to the centre right, but there is no easy solution.
An alliance with Ciudadanos (57 seats) would give him the numbers, but its leader, Albert Rivera, was bitterly critical of Mr Sánchez's collaboration with Catalan separatists, referring to his earlier "Frankenstein government".
As the Socialist leader gave his victory speech late on Sunday, supporters chanted "Not with Rivera!", making it clear they did not want a coalition with Ciudadanos.
The head of previous coalition partner Podemos, Pablo Iglesias, made clear on Sunday night that another left-wing administration was possible.
But the results appear to make any left-coalition dependent on Catalan pro-independence parties, which opponents on the right see as toxic.
An alliance involving all the other regional parties, including the Basque separatist PNV, would leave him one seat short of a majority.
Why is Catalonia so important?
The future of Spain's north-eastern region was one of the big issues of the election.
The semi-autonomous region held an independence referendum in October 2017 and then declared its independence from Spain.
A dozen of its leaders have since gone on trial in Madrid, facing charges including rebellion and sedition. Among them is ERC leader Mr Junqueras, who was Catalan vice-president when he was arrested.
During last Monday's election debate, the leaders of the PP and Ciudadanos accused the prime minister of siding with "enemies of Spain" and wanting to "liquidate Spain".
Analysts say support for Vox has been boosted by widespread anger at the Catalan independence drive. The party fervently opposes any concessions to the secessionists.
PM Pedro Sánchez's party polled 29% and will need the help of either left-wing Podemos and regional parties, or the centre right, to form a government.
For the first time since military rule ended in the 1970s, a far-right party is set to enter parliament.
Vox opposes multiculturalism, feminism and unrestricted migration.
The other big story of the election was the collapse in support for the Popular Party (PP), which governed Spain until it was dumped from power in May 2018 in a no-confidence vote.
In its worst election ever, the PP won just 66 seats, down from 137 in the previous parliament.
In his victory speech, Mr Sánchez said the party's big challenges were to fight inequality, advance co-existence and halt corruption.
"The future has won and the past has lost," he told cheering supporters. During his time in office he has raised the minimum wage, appointed a female-dominated cabinet and promised to bring in laws defining rape as sex without clear consent.
The Socialists won 123 seats while their former coalition partner, Podemos, won 42.
The result is a personal success for the prime minister, who increased his party's share from 23% of the vote in 2016.
But it still leaves the Socialists and Podemos 11 seats short of the necessary 176 for a majority.
Mr Sánchez could make up the numbers with smaller regional parties, including Basque nationalists, but he is likely to need the help of Catalan pro-independence parties, which withdrew their support for his government last month, forcing the election.
The centre-left Catalan ERC was the big winner in Catalonia, with a projected 15 seats. Its leader, Oriol Junqueras, is in jail facing trial for his role in declaring independence in October 2017 and tweeted thanks for the million votes his party received.
The PP's historic defeat means that, even with the support of centre-right Ciudadanos (Citizens) and Vox, it has no chance of forming a coalition, and leader Pablo Casado said it would become the main opposition force.
Vox won more than 10% of the vote, which gives it 24 seats in the 350-seat parliament.
Turnout was 75.8%, the biggest for several years and 9% higher than the previous election in 2016.
What the leaders said
Pedro Sánchez, Socialists: "We have sent a clear and powerful message from the people of Spain to Europe and the world, that it is possible to beat reactionaries and authoritarianism and regression."
Pablo Casado, PP: "The result has been very bad… because the centre-right vote has fragmented, that vote has become a very difficult vote to win."
Albert Rivera, Ciudadanos: "We accept that others have won the election... sooner rather than later we will govern Spain."
Pablo Iglesias, Podemos: "I have told [Sánchez]... of our willingness to work towards a coalition government."
Santiago Abascal, Vox: "We told you that we were starting a reconquest of Spain and that is exactly what we have done... and we can clearly say to all of Spain that Vox is here to stay."
Who are Vox?
Led by Santiago Abascal, a former member of the conservative PP, the party has emerged in a matter of months with a vow to "make Spain great again".
It won seats for the first time in local elections in the southern Andalusia region, and agreed to support a centre-right coalition of the PP and Ciudadanos.
Vox rejects the far-right label but its views on immigration and Islam place it in line with far-right and populist parties elsewhere in Europe.
It wants to repeal laws against gender violence, and opposes abortion and same-sex marriage. Critics see it as a nationalist throwback to fascist dictator Francisco Franco, who ruled Spain until his death in 1975.
Vox aims to deport migrants legally entitled to be in Spain if they have committed an offence, and wants to prevent any migrant who comes in illegally from staying.
Can Sánchez form a government?
He can choose either to look to the left or to the centre right, but there is no easy solution.
An alliance with Ciudadanos (57 seats) would give him the numbers, but its leader, Albert Rivera, was bitterly critical of Mr Sánchez's collaboration with Catalan separatists, referring to his earlier "Frankenstein government".
As the Socialist leader gave his victory speech late on Sunday, supporters chanted "Not with Rivera!", making it clear they did not want a coalition with Ciudadanos.
The head of previous coalition partner Podemos, Pablo Iglesias, made clear on Sunday night that another left-wing administration was possible.
But the results appear to make any left-coalition dependent on Catalan pro-independence parties, which opponents on the right see as toxic.
An alliance involving all the other regional parties, including the Basque separatist PNV, would leave him one seat short of a majority.
Why is Catalonia so important?
The future of Spain's north-eastern region was one of the big issues of the election.
The semi-autonomous region held an independence referendum in October 2017 and then declared its independence from Spain.
A dozen of its leaders have since gone on trial in Madrid, facing charges including rebellion and sedition. Among them is ERC leader Mr Junqueras, who was Catalan vice-president when he was arrested.
During last Monday's election debate, the leaders of the PP and Ciudadanos accused the prime minister of siding with "enemies of Spain" and wanting to "liquidate Spain".
Analysts say support for Vox has been boosted by widespread anger at the Catalan independence drive. The party fervently opposes any concessions to the secessionists.
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