Obama thanked supporters on Twitter, saying: "We're all in this together. That's how we campaigned."
Mr Romney, a former Massachusetts governor, pushed the result to the wire, taking Indiana from his rival and appearing to lead in the popular vote. But key battlegrounds, including Ohio and New Hampshire, were called for President Obama taking him over the 270 electoral college barrier needed for victory, according to media projections.
The projected win, which came through at 4.19am UK time, brought scenes of jubilation at Obama's campaign headquarters in Chicago. President Obama tweeted a photograph of himself hugging wife Michelle with the caption "four more years".
Latest projections put him on 275 in the electoral college, which awards each state votes according to population size.
With most of the US firmly carved up along party lines the contest has turned on a handful of states that are neither staunchly Democratic or Republican.
Mr Romney took North Carolina, worth 15 votes in the electoral college, but President Obama beat his opponent in Iowa and Oregon. Bellwether state Ohio has seen some of the most intensive campaigning and secured 18 electoral votes for the president.
During his concession speech, Mr Romney said Mr Obama faced major challenges, adding: "I pray the president will be successful in guiding our nation."