IOWA -- Texas Sen. Ted Cruz has won the Iowa Republican caucuses, according to a CNN projection, a huge victory for him and a bitter defeat for Donald Trump in the country's first presidential contest.
Democrats, meanwhile, are in a nail-biter fight with Hillary Clinton and Bernie Sanders tied.
The victory for Cruz is the first time that the conventional laws of politics have applied to Trump, a billionaire businessman who has built his campaign around the perception that he's a winner who can bring his unique skills to the White House.
But Trump's big personality, social media presence and large rallies failed to overcome Cruz's more traditional approach to Iowa's retail politics. Cruz spent months touring the state and reaching out to evangelical voters.
The win sets Cruz up as a formidable contender in the delegate-rich, Southern states that crowd the GOP calendar in the coming weeks and offers movement conservatives hope that one of their own can become the nominee for the first time since Ronald Reagan.
But Trump said he's still confident he'll win the presidency.
"We will go on to get the Republican nomination and we will go on to easily beat Hillary or Bernie," Trump told supporters. "We finished second, and I have to say I am just honored."
Democratic dead heat
Clinton said she was breathing a "big sigh of relief" after the caucuses -- even though she was tied with Sanders.
"It's rare that we have the opportunity we do now -- to have a real contest of ideas, to really think hard about what the Democratic Party stands for and what we want the future of our country to look like," Clinton said in a speech that didn't explicitly claim victory.
Sanders told a raucous crowd chanting "Bernie, Bernie" that his campaign had made stunning progress in a short period of time.
"Nine months ago, we came to this beautiful state, we had no political organization, we had no money, we had no name recognition, and we were taking on the most powerful political organization in the United States of America."
"And tonight," he said, "while the results are still not known, it looks like we are in a virtual tie."
Democratic and Republican casualties
The caucuses resulted in two casualties -- one on each side.
Former Maryland Gov. Martin O'Malley, a Democrat, and former Arkansas Gov. Mike Huckabee, a Republican, both dropped their candidacies after faring poorly.
Rubio thrilled with his showing
Republican Marco Rubio also had a strong night in Iowa, which could set him up as the best placed potential establishment candidate to take on "outsider" challengers Cruz and Trump.
"This is the moment they said would never happen. For months, they told us we had no chance," a jubilant Rubio said, as he became the first candidate to appear before the cameras to comment on the results.
"They told me that I needed to wait my turn, that I needed to wait in line. But tonight here in Iowa, the people of this great state have sent a very clear message --- after seven years of Barack Obama, we are not waiting any longer to take our country back."
Several candidates visited caucus sites on Monday evening. Trump mingled with voters at one West Des Moines location with his wife, Melania, and did some last minute campaigning.
"We are going to strengthen our borders, we are going to build a wall. We are going to bring our country back," Trump said, stirring cheers from some in the audience.
Long-shot candidate Carly Fiorina appeared at the back of the room at the same caucus site and waved to those inside. Cruz was also expected to head to a caucus location.
Several hundred thousand Iowans in 1,681 precincts are expected to venture out with scattered snow showers in the forecast to exercise their cherished right to cast the first votes in the race that will determine the 45th President of the United States.
The Iowa caucuses have huge symbolic power, and while they don't always predict who will be sworn in as the next president, they can offer a crucial boost to candidates who do well. They also spell doom for those who barely register and then do badly in the New Hampshire primary.
Even before the caucuses began, Carson's campaign said he wouldn't go directly to New Hampshire or South Carolina -- the site of the next primary contests. Instead, the retired neurosurgeon, who was briefly the Iowa front-runner last fall, will go to Florida to rest and see family.
Former Pennsylvania Sen. Rick Santorum is also skipping New Hampshire. He will go straight to South Carolina, which holds its Republican presidential primary on February 20.
CLICK HERE for complete Iowa caucus results via FOX6Now.com.