The polls cap a year of electoral change in southern Europe after Syriza swept to power in Greece in January and a coalition of leftist parties in Portugal pooled their votes in parliament to unseat the conservative government after an inconclusive election in October.
Official results showed Spain's ruling PP obtained 123 seats -- 63 less than in 2011 -- with 28.7 percent of the votes.
The PSOE followed with 90 seats and 22 percent of the vote, then Podemos with 69 seats and 20.6 percent, and finally centrists Ciudadanos got 40 seats or nearly 14 percent.
The results mean that the parliament will be constituted of four main groupings of significant clout, as opposed to the usual PP and Socialists tandem.
But even if left-wing and right-wing parties group together -- the Socialists with Podemos or PP with Ciudadanos -- neither would be able to govern with an absolute majority.
One outcome could be a coalition between the Socialists, Podemos and Ciudadanos in order to lock out the PP and bring about a government of "change", though any three-way negotiations would be extremely complicated.