Viktor Yanukovich's pro-Russian Regions party won the most seats, but Tymoshenko emerged as a rejuvenated political figure, saying that "Orange Revolution" liberals could close ranks to keep the pro-Russian party in opposition.
The outcome was a double humiliation for Viktor Yushchenko, the president, who defeated Yanukovich in a presidential poll re-run after December's 2004 street protests, and later fell out with Tymoshenko, his former Orange Revolution comrade.
According to exit polls, the Regions party won between 27% and 31% of the vote, the Tymoshenko bloc won between 22% and 24% and the pro-Yushchenko party trailed in third place with about 15%.
Tymoshenko's strong showing effectively meant that she took over as standard-bearer of the "Orange" liberals from Yushchenko and he now has little choice but to paper over differences with her.
Tymoshenko said three liberal parties, her own Yulia Tymoshenko bloc, Our Ukraine and the socialists, had won enough votes to form a majority and that a coalition deal was "practically ready".
"Our political aim will be to follow the path the country chose in the last presidential election"
She implied she would be back as prime minister to head the coalition - a shot aimed at Yushchenko, who sacked her from the post last September after infighting in "Orange" ranks over corruption charge allegations.
Tymoshenko told a news conference: "In this coalition agreement ... it is said that the political group holding first place has the right to propose a candidate to head the government. [But] our political aim will be to follow the path the country chose in the last presidential election."
Disillusionment over splits in the "Orange" team and an economic slowdown clearly contributed to the big score for Yanukovich, strong in Russian-speaking eastern Ukraine.
Viktor Yushchenko's (C)
party came third in the polls
At stake is the fate of a country of 47 million, whose "Orange" leaders have been unable to deliver on promises after prising Ukraine loose from centuries of Russian domination and setting it on a course for joining the European mainstream.
Yushchenko, made no immediate comment after the polls but the head of his campaign team said the president also wanted a restored "Orange" team and that he could play a decisive role.
Yanukovich, who is also a former prime minister, also invited other parties to join a coalition.
"We are ready to take the responsibility of forming a government and we call on everybody who holds Ukraine's fate dear to join us," he told reporters.
Yanukovich's party may be unable
to form the next government
But despite his comeback after a shattering defeat in 2004, the apparent strong showing of Tymoshenko's bloc seemed to make this an unlikely prospect.
Before the vote, many surveys had predicted that Yushchenko's party would take second place comfortably, and speculation was widespread of a grand coalition with Yanukovich.
But the day belonged to Tymoshenko, whose oratory electrified thousands in Kiev in the Orange Revolution.
True to form, after the exit poll results came in, she played a strong populist card saying that if she returned to power, a deal in January that sharply increased the price of imported Russian gas would be scrapped.
Hleb Vyshlynsky, an analyst for Gfk-USM Ukraine consultancy, said: "Two versions are realistically possible - either a failure to form a government and a dissolution of parliament or a government headed by Tymoshenko."
But long talks may still be on the cards to form a coalition able to command a majority in parliament that under new constitutional rules can choose the prime minister.