The MDC won 31 seats in its urban strongholds of Harare, Zimbabwe's second city of Bulawayo and Mutare near the border with Mozambique following voting on Thursday that elections officials said had been peaceful.
President Robert Mugabe's Zimbabwe African National Union - Patriotic Front (ZANU-PF) picked up eight seats mostly from the rural Mashonaland area which has been its traditional support base, according to first results.
Turnout was on average below 50% in the elections, following weeks of campaigning that were free of the bloodshed that marred the previous ballots in 2000 and 2002.
Among those elected was Mugabe's nephew Patrick Zhuwawo while three senior MDC party members, Welshman Ncube, Gibson Sibanda and Innocent Gonese retained their seats.
Parliament speaker Emmerson Mnangagwa, who was tipped to succeed Mugabe until a major shake up in the ZANU-PF party leadership late last year, was defeated in the central Kwekwe constituency.
The ZANU-PF candidate lost Highfield constituency where Mugabe predicted victory when he cast his vote. ZANU-PF also lost the Glen Norah constituency of Harare where Mugabe gave his final rally on Wednesday.
Some 5.8 million voters cast ballots for 120 contested seats in parliament in elections that were free of the bloodshed that marred the two past elections when scores were killed and beaten in political violence.
The elections are seen as a test for Mugabe who has vowed to make good on its commitment to hold a free and fair vote, in accordance with guidelines for democratic polls agreed last year by regional leaders.
In the last parliamentary vote in 2000, the MDC picked up 57 seats while ZANU-PF got 62, but under Zimbabwe law, the president directly appoints 30 members of parliament, meaning that the ruling party was able to command a strong majority in parliament.
To win in this election, the MDC would have to gain 76 seats compared to only 46 for ZANU-PF, which can again rely on presidential appointments to pad its majority in parliament.