The Chinese Nationalist Party's (KMT) Chiang Yi-hsiung (
Chiang, who is a law professor at Chiayi's National Chung Cheng University, received 42,879 votes, winning by 3,038 votes.
The voter turnout rate was just 45.2 percent.
The by-election was held in order to fill the vacancy left by the KMT's Huang Min-hui (
The by-election gives the KMT a total of 88 seats in the legislature, the same number held by the DPP.
Chiang's win also helped increase the pan-blue camp's legislative majority to 112 out of 221 occupied seats.
Chiang declared victory before the official result had even been announced.
Chen, who suffered her second defeat after also losing the Chiayi mayoral election, expressed regret over the result, and urged the pan-blue camp not to simply oppose everything the government proposes.
"We hope that the legislature will give more support to the government. Do not oppose our livelihood bills and budgets for no reason," she said.
The KMT's victory in Chiayi, a city in which the pan-green camp used to enjoy a high support rate, showed that the KMT has won local residents' hearts, the party said.
"I think the party's second victory in the city proved that Huang's win was not just an isolated phenomenon. The city's residents have identified with the KMT," said Liao Feng-teh (