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The election commission confirmed the result hours after polls closed
Malaysia's governing coalition has called for national reconciliation after it was re-elected in the most hard-fought poll since independence.
Prime Minister Najib Razak's Barisan Nasional (BN; National Front) coalition won 133 of the 222 seats - its worst-ever poll result.
Mr Najib said there had been a worrying polarisation in voting, as many ethnic Chinese backed the opposition.
Anwar Ibrahim, whose opposition bloc won 89 seats, has alleged fraud.
He told the BBC he was demanding an investigation into alleged abuses, saying that the result did not reflect the will of the people.
He called on supporters to stage a protest on Wednesday.
Mr Najib, 59, meanwhile, was sworn in as prime minister by Malaysia's king in the capital, Kuala Lumpur, on Monday afternoon.
'Tsunami'The polls saw an 80% voter turn-out, amid strong campaigning from both sides.
The BN, which has been in power for 56 years, secured a simple majority but failed to regain the two-thirds parliamentary majority it lost for the first time in 2008.
As the result was confirmed, Mr Najib urged all Malaysians to accept his coalition's victory but acknowledged there was work ahead.
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Anwar said irregularities cost him seats
"One of the programmes we will undertake is national reconciliation... I think we realise that there are a lot of things we have to do as a party."
He noted that ethnic Chinese voters had turned to the opposition, which has pledged to reform the government's affirmative action policies that benefit ethnic Malays, in what he called "a Chinese tsunami".
"The results show a trend of polarisation which worries the government. If it is not addressed, it can create tension or division in the country," Mr Najib said.
Unconfirmed reports suggested that the coalition did not receive a majority of the popular vote.
Tallies by independent online media gave the BN coalition 49%, which would make Mr Najib the first leader to win with a minority of the popular vote, AFP news agency reported.
Mr Anwar, meanwhile, who led a three-party alliance into the polls, accused the authorities of electoral abuses which he said had distorted the result.
- Election was considered Malaysia's most keenly contested poll since independence
- PM Najib Razak leads the long-dominant coalition Barisan Nasional (National Front)
- Anwar Ibrahim leads the three-party opposition coalition Pakatan Rakyat
- Key poll issues included corruption, race-based policies that favour ethnic Malays, and the economy
- Turnout was estimated at a record 80%, election officials said
- In 2008, of the 222 seats in parliament the BN won 140 and the opposition won 82
"It is an election that we consider fraudulent and the Electoral Commission has failed," he told a news conference after midnight on Monday.
"We see these irregularities have cost us many seats, particularly those with narrow margins," he said.
Shares upAllegations of election fraud had surfaced before the election. Some of those who voted in advance said that indelible ink on their hands - supposed to last for days and show they had already voted - had easily washed off.
The opposition accused the government of funding flights for supporters to key states, which the government denied.
Independent pollster Merdeka Center also cited unconfirmed reports of foreign nationals being given ID documents and being allowed to vote.
Ahead of the polls Malaysia's Election Commission said it had done all it could to keep the polls clean.
This result is a bitter blow to the opposition coalition, after a spirited campaign that tapped into a hunger for change among many younger Malaysians, the BBC's Jonathan Head in Kuala Lumpur reports.
They had believed a surge of support, especially in urban areas, would be enough to unseat a ruling coalition that has been in government for more than half a century, our correspondent adds.
Thousands of opposition supporters swapped their Facebook profile photos for black boxes to show their dismay when they learned that the ruling coalition had retained power, AP news agency reported.
But Malaysian shares reacted positively to news that the BN had won.
The FTSE Bursa Malaysia KLCI Index jumped as much as 9.5% to a lifetime high of 1,826.22 in early trade on Monday, before ending the day higher by 3%.
The local currency, the ringgit, hit a 10-month high.
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