The latest projections based on partial results and exit polls show Democrat Obama, the 44th U.S. president and the first African-American occupant of the Oval Office, winning at least 303 electoral votes.
He delivered a victory speech to a crowd of supporters in Chicago, urging them and all Americans to continue to "sustain" their hope.
"Tonight in this election, you, the American people, reminded us that while our road has been hard, while our journey has been long, we have picked ourselves up, we have fought our way back," Obama said, "and we know in our hearts that for the United States of America the best is yet to come."
He added that he would "return to the White House more determined and more inspired than ever about the work there is to do and the future that lies ahead."
"We want our children to live in an America that isn't burdened by debt, that isn't weakened by inequality, that isn't threatened by the destructive power of a warming planet," Obama told the cheering crowd. "We want to pass on a country that's safe, and respected, and admired around the world, a nation that is defended by the strongest military on Earth and the best troops this world has ever known."
Romney, a former Massachusetts governor, offered his congratulations to Obama and gratitude to his campaign staff and supporters in a concession speech in front of his campaign headquarters in Boston.
"I have just called President Obama to congratulate him on his victory," Romney said. "His supporters and his campaign also deserve congratulations. I wish all of them well, but particularly the president, the first lady, and their daughters. This is a time of great challenges for America and I pray that the president will be successful in guiding our nation."
Romney told supporters it was not the time for "partisan bickering and political posturing."
Obama’s victory was declared after the networks projected the incumbent winning the closely contested state of Ohio, propelling Obama beyond the 270-vote Electoral College majority needed to secure the presidency under America’s system.
The U.S. Electoral College, not the nationwide popular vote, decides the presidency. Each state has a share of electoral votes, based on its population.
Obama appeared to prevail despite a weak U.S. economy and high unemployment -- circumstances usually seen as hurting reelection chances.
WATCH: Mitt Romney congratulated Barack Obama and thanked his supporters and campaign staff:
Obama emerged victorious in most of the states that, before election day, were closely competitive swing states, including Ohio, Iowa, Michigan, New Hampshire, Pennsylvania, Virginia, and Wisconsin.
Obama also won in northeastern states such as New York and Massachusetts, and in much of the west, including California, Oregon, Washington, Nevada, and Colorado.
The race is still too close to call in Florida, a swing state in previous elections that accounts for 29 electoral votes. Obama won the state in 2008.
Romney lost his home state of Michigan, where his father was governor, and also Wisconsin, the home state of his vice presidential running mate, Paul Ryan.
WATCH: U.S. broadcaster ABC News calls the victory for President Barack Obama after swing state Ohio is projected his way:
Meanwhile, Republicans retained control of the House of Representatives, while Democratic lawmakers kept their narrow majority in the Senate.
With the chambers of Congress again divided between the parties, passing major legislation could continue to be challenging for Obama when he begins his second four-year term.
The two major American parties have been deadlocked for years on a range of legislation.