DES MOINES, Iowa (CNN) -- Sen. Barack Obama's victory Thursday in critical Democratic Iowa caucuses indicate voters saw him as a candidate of change, according to entrance polls.
"You have done what the cynics said we couldn't do," says Barack Obama after his Iowa triumph.
Garnering 38 percent, the freshman Illinois senator is the first African-American ever to win the Iowa caucuses, a key stepping stone on the path to the White House.
"On this January night, at this defining moment in history, you have done what the cynics said we couldn't do," Obama told wildly cheering and chanting supporters Thursday night. "We are choosing hope over fear, we are choosing unity over division and sending a powerful message that change is coming to America." Watch Obama's victory speech »
With all of Iowa's precincts reporting Thursday night, Obama was followed by former North Carolina Sen. John Edwards and New York Sen. Hillary Clinton -- Edwards taking just under 30 percent and Clinton taking just over 29 percent.
New Mexico Gov. Bill Richardson ended the night with slightly more than 2 percent and announced he would stay in the race, but two other Democrats -- Sens. Joe Biden of Delaware and Christopher Dodd of Connecticut -- announced they were dropping out. Biden finished the night with almost 1 percent and Dodd finished with less than .1 percent. Rep. Dennis Kucinich of Ohio did not win any delegates.
The finish was a blow to Clinton -- the presumptive front-runner in the months leading up to this year's campaign who had hoped a win in Iowa would be the start of an uninterrupted run to the nomination.
But due to the way Iowa splits its delegates, all three of the top finishers will leave the state having earned roughly the same amount of support at the state's Democratic convention later this year, when attendees will divide delegates for the party's national convention. See dramatic caucus night photos »
"Just over half of Democratic caucus-goers said change was the No. 1 factor they were looking for in a candidate, and 51 percent of those voters chose Barack Obama," said CNN senior political analyst Bill Schneider. "That compares to only 19 percent of 'change' caucus-goers who preferred Clinton." See more caucus analysis »
Clinton had worked to convince Iowa caucus-goers she has the experience to enact change, while Edwards and Obama preached that she is too much of a Washington insider to bring change to the nation's capital.
Twenty percent of Democrats said Clinton's campaign mantra -- experience -- was the most important attribute of a presidential candidate.
At Obama's caucus-night headquarters in Des Moines, the hall filled with people late Thursday in anticipation of the candidate's speech.
The supporters, many of them young, screamed "We did it!"
When vote returns appeared on big television screens, the crowd burst into spontaneous rounds of Obama's campaign chant: "Fired up -- Ready to go!"
Obama campaigned in Iowa as the true agent for change in a field of Democrats hoping to cash in on voter dissatisfaction with President Bush. See slideshow of the night's events »
He banked heavily on the support of first-time caucus participants and independents, whom pre-caucus polls suggested were responding well to a campaign that included promises to work across party lines if elected.
CNN's entrance polls suggested that message resonated. Younger caucus-goers and those who said they want change gave significant support to Obama.
Fifty-seven percent of poll respondents age 17 to 29 said they supported Obama, compared with 11 percent for Clinton and 13 percent for Edwards, according to entrance polls. Surprising analysts, female voters also selected Obama over Clinton.
David Axelrod, senior adviser to Obama, said the campaign was thrilled at the support from young voters, independents and "some disillusioned Republicans and new voters."
He said the campaign has aimed to bring in new voters and that the Democratic Party "has to start thinking about how to bring a coalition together behind a progressive agenda."
Democratic caucus turnout was much higher than four years ago. "With 93.5 percent of the precincts reporting we are seeing record turnout with 218,000 caucus attendees," said a statement from the state Democratic Party. In 2004, the turnout was about 125,000.
Edwards opened his remarks to supporters Thursday by talking about change.
"The one thing that's clear from the results in Iowa tonight is the status quo lost and change won," Edwards said. Watch Edwards vow to keep on fighting »
Obama's victory came despite Clinton's support from EMILY's List, a national group that works to elect female candidates who favor abortion rights. The group contacted 60,000 Iowa women with no history of caucusing and asked them to support Clinton.
The Clinton campaign itself also contacted tens of thousands of Iowans who had never caucused. Most of them were age 50 and above. The campaign set up a "buddy" system to encourage the newcomers to attend caucuses.
Appearing in front of cheering supporters Thursday with her husband, former President Bill Clinton, at her side, Clinton refused to back down.
"I am so ready for the rest of this campaign and I am so ready to lead," she said, smiling. Watch Clinton's speech after failing to win »
"I have done this work for 35 years, it is the work of my lifetime," Clinton said. "I have been involved in making it possible for young people to have a better education and for people of all ages to have health care and that transforming work is what we desperately need in our country again."
"I think you could probably look at two things when it comes to Hillary Clinton: One is the sense that she could be very divisive in a general election campaign -- people in Iowa don't seem to want that," said CNN political analyst Gloria Borger. "And secondly, her history question, the Clinton baggage, if you will. There are a lot of voters there who are saying, 'We want to get beyond that.' "
Obama also did well among caucusers with varied issues at the top of their concerns. Thirty-four percent of voters who said their top issue was health care went for Obama, according to entrance polls; 35 percent among those who said the Iraq war was their top issue chose Obama; 36 percent among those who chose the economy chose him.
David Gergen, a former White House aide under Republican and the Clinton administrations, pointed out that Iowa was not a strong state for Clinton from the start. "The Clintons are nothing if not resilient," he said. "They will fight back. For Barack Obama, this is a personal triumph. For an African-American to go into a state that's 95 percent white and win against Mrs. Clinton is an absolutely remarkable victory." E-mail to a friend
CNN's Candy Crowley, Suzanne Malveaux and Jessica Yellin contributed to this report.