Many votes still remain to be counted but Democrat gains in many main seats led the White House to acknowledge, late on Tuesday night, that it had lost control of the house.
Tony Snow, White House spokesman, said:"We believe Democrats will have control of the House, and look forward to working with Democratic leaders on the issues that remain foremost on the agenda, including winning the war in Iraq and the broader war on terror and keeping the economy on a growth path.
"But it also gets us to a point: Democrats have spent a lot of time complaining about what the president has done. This is an opportunity for them to kind of stand up."
The elections have been shaped by an unpopular war in Iraq, scandal at home and dissatisfaction with George Bush, the president.
Nancy Pelosi, new Democrat speaker in the house, said after the White House announcement: "Staying the course has not made our country safer, has not honoured our commitment to our troops and has not made the region more stable.
"We cannot continue down this catastrophic path. And so, we say to the president: Mr President, we need a new direction in Iraq. Let us work together to find a solution."
Democrat control of the house gives them the power to block and delay many of Bush's policies.
Senate race continues
In the Senate, the other of Congress's two houses, Democrats have taken four of the six seats they need to take control.
However, analysts have said that the Democrats will need to win the remaining two seats in order to take control of the Senate.
"I think we will hold control of the Senate," Ken Mehlman, the Republican national chairman, said on CNN.