Best is yet to come, vows Obama
At the end of one of the closest and most bitterly contested elections of recent times, Mr Obama told ecstatic supporters in his home town of Chicago "we have picked ourselves up, we have fought our way back".
His victory speech came after his Republican rival conceded defeat as the crucial "swing" states where the election was decided fell to the President.
Mr Romney - the former businessman who claimed he could "fix" America's broken economy - told his supporters that he and running mate Paul Ryan had "given our all" for the campaign. He offered his congratulations to Mr Obama, saying: "I pray he will be successful in guiding our nation."
After a contest which many pundits had said was too close to call, the President was returned with a surprising comfortable margin of victory with 303 votes in the electoral college compared to 206 for Mr Romney.
However the figures belied the deep divisions within the country, with the popular vote almost equally spilt between the two candidates. With returns in from 79% of the nation's precincts, Mr Obama had 52.2 million votes to Mr Romney's 51.7 million.
Meanwhile the congressional elections saw the Republicans retain control of the House of Representatives while the Democrats held a narrow majority in the Senate - potentially foreshadowing a further period of legislative gridlock in Washington.
Mr Obama - who fought the election with the highest rate of unemployment of any president since Franklin Roosevelt in the 1930s - sought to rally the nation with an appeal to the spirit which had "triumphed over war and oppression".
"Tonight, despite all the hardship we have been through, despite all the frustrations of Washington, I have never been more hopeful about our future, I have never been more hopeful about America," he declared in a speech which recalled the soaring rhetoric of his 2008 election campaign.
Mr Obama's victory was sealed in the nine battleground states, where the two candidates and their allies spent almost one billion US dollars in television advertising. The President won in Ohio, Wisconsin, Virginia, Iowa, New Hampshire, Colorado and Nevada, with Mr Romney capturing only North Carolina while Florida remained too close to call.