"You have given a clear mandate to New Democracy to continue the changes and reforms which the country needs," Karamanlis said in a televised address to the nation.
"I will do my utmost to honour your confidence as prime minister of all Greeks," Karamanlis said.
Scores of ruling party supporters gathered outside polling stations in Athens and the second city Salonika, dancing, waving party flags, sounding car horns and setting off fireworks.
Early results from over 60 per cent of polling stations showed the ruling conservatives leading the socialists by 43.05 percentage points to 38.6.
Socialist leader George Papandreou, foreign minister until 2004, had conceded defeat moments before Karamanlis spoke.
"The people have decided... and the result is an unfavourable one," Papandreou said.
"Pasok gave a great battle but it could not win. We all had responsibilities in this battle, myself above all," he said.
Karamanlis' party won a second straight term despite initial concern that his government's credibility had been badly damaged by its shaky handling of the devastating forest fires which killed more than 60 people and ravaged huge swathes of forest and farm land in August.