Democrats won a narrow majority in the Senate and regained total control of Congress after 12 years of near-domination by the Republican Party.
Embattled Defense Secretary Donald Rumsfeld resigned, and US President George W. Bush shouldered "a large part of the responsibility" for Republican losses.
"It was a thumping," Bush said on Wednesday.
The shift dramatically alters the government's balance of power, leaving Bush without Republican congressional control to drive his legislative agenda. Democrats hailed the results and issued calls for bipartisanship even as they vowed to investigate administration policies and decisions.
Democrats completed their sweep on Wednesday evening by ousting Republican Senator George Allen of Virginia, the last of six Republican incumbents to lose re-election bids in a midterm election marked by deep dissatisfaction with the president and the war in Iraq. The Democrats will have 51 seats in the 100-seat Senate when Congress reconvenes in January.
Democrats had 229 seats in the House, 11 more than the number necessary to hold the barest of majorities in the 435-member chamber.
"In Iraq and here at home, Americans have made clear they are tired of the failures of the last six years," said Senator Harry Reid of Nevada, who is in line to become Senate Majority leader when Congress reconvenes in January.
As watershed elections go, this one rivaled the Republicans' takeover in 1994, which made Newt Gingrich speaker of the House -- the first Republican to run the House since the 1950s Eisenhower administration.
Allen lost to Democrat Jim Webb, a former Republican who served as Navy secretary in the Reagan administration.
A count showed Webb with 1,172,538 votes and Allen with 1,165,302, a difference of 7,236.
Democrats will have nine new senators on their side of the aisle as a result of Tuesday's balloting. Six of them defeated sitting Republican senators from Pennsylvania, Ohio, Missouri, Rhode Island, Montana and Virginia. The other three replaced retiring senators from Maryland, Minnesota and Vermont.
Their ideologies are as varied as their home states. Bernie Sanders, an independent who will replace Vermont Senator Jim Jeffords, is a Socialist who has served in the House and voted with Democrats since 1990. Bob Casey Jr, who defeated Republican Senator Rick Santorum in Pennsylvania, is an anti-abortion moderate.
Webb once declared that the sight of former president Bill Clinton returning a Marine's salute infuriated him.
China said yesterday that it hoped the new US Congress would play a "constructive role" in bilateral relations and continue strengthening cooperation, following the Democrats' win in mid-term elections.
"Maintaining good Sino-US relations serves the common interest of Chinese and American people and is beneficial for the peace, stability and prosperity of the region and the world," Chinese foreign ministry spokeswoman Jiang Yu (姜瑜) told a regular press briefing.
"To develop sound, healthy and stable relations between China and the US is a consensus of the Republicans and the Democrats and we hope the Congress will play a constructive role in promoting this relations," she said.
Jiang sidestepped a reporter's question on the impact of Pelosi taking charge of the US Congress.
Pelosi has said human rights should play a prominent part in US policy towards China.