The opposition People's Democratic Party (PDP) has won the second-ever parliamentary election in Bhutan.
The PDP beat the ruling Druk Phuensum Tshogpa (DPT) party, which has strong links to the king.
The turnout was high at about 80%, said officials. The kingdom's struggling economy and ties with neighbouring India were key issues in the campaign.
The country has been a democracy since 2008, when the king voluntarily relinquished his absolute power.
The PDP won 32 of the country's 47 parliamentary seats, according to results posted on the official website of Bhutan's Election Commission.
The DPT, which won the last election in 2008, only secured 15 seats in Saturday's poll.
PDP leader Tshering Tobgay is likely to be named prime minister of the new government, the Associated Press news agency reports.
The PDP has criticised the government for a recent deterioration of ties with India, a key ally.
For decades, Bhutan has relied on its giant southern neighbour for much of its trade and foreign policy.
India's recent massive reduction of oil and gas subsidies for Bhutan has sparked speculation that this may be because of the Himalayan country's improving relations with China.