Incumbent President Ma Ying-jeou of Taiwan has won a second term in office, promising to further improve ties with neighbouring China.
Opposition candidate Tsai Ing-wen has admitted defeat and resigned as chairwoman of her party. She congratulated the president on his victory.
Mr Ma campaigned on his record of improving economic ties with neighbouring China.
China does not recognise Taiwan, regarding the island as a renegade province that broke away when the civil war ended in 1949. It wants unification.
''In the next four years, cross-strait relations will be more peaceful, with greater mutual trust and the chance of conflict will be less,'' Mr Ma told jubilant supporters.
''I must let Taiwan have a long-lasting environment of peace and stability.''
He added: ''This is not my personal victory, the victory belongs to all Taiwanese. They told us that we are on the right track.''
The BBC reports Ms Tsai's DPP favours formal independence from China, although Beijing has repeatedly threatened retaliation if Taiwan makes such a move.
With about 90% of votes counted, the Central Election Commission said Mr Ma had won 51% against 46.3% for Ms Tsai.
A third contender, James Soong, formerly a senior figure in Mr Ma's party, the Kuomintang (KMT), had 2.7%.
Taiwan is in its worst economic downturn in decades and unemployment has been rising.
However, most voters still view relations with China as the most important issue.
During Mr Ma's presidency, regular direct flights and shipping links have been established with China and a landmark trade deal was signed that cuts tariffs on hundreds of Taiwanese exports to the mainland.
Beijing has 1500 missiles aimed at the island to deter any attempt to declare independence.