In Almere, the PVV won 21 per cent of the vote to Labour's 18 per cent, initial results showed.
In The Hague, the PVV had 8 seats, second to Labour with 10 seats. Turnout in the elections was put at 56 per cent.
"The leftist elite still believes in multi-culturalism, coddling criminals, a European super-state and high taxes," Wilders told cheering supporters at a rally in Almere after polling ended on Wednesday.
"But the rest of the Netherlands thinks differently. That silent majority now has a voice."
Wilders, who has faced death threats, was under tight security at his rally on Wednesday.
People had to pass through metal detectors and security officers patted everyone down for concealed weapons.
The PVV has been pitching its policies to a nation of 16 million, including nearly one million Muslims, that is turning increasingly inward as the economy struggles and social tensions rise.
The popularity of Wilders, who compares Islam to fascism and the Quran to Adolf Hitler's book Mein Kampf, has dented the image of the Netherlands as a country that has often portrayed itself in the past as a bastion of tolerance.
Andre Krouwel, professor of political science at Vrije University in Amsterdam, said: "You can see there's a lot of discontent in the electorate.
"Clearly Wilders is going to use these results as a stepping stone for national elections."
Balkenende saw his coalition collapse on February 20 after his centre-right Christian Democrats failed to persuade their Labour partners to extend the Netherlands' military mission in Afghanistan.
He has said the nearly 2,000 Dutch troops serving with Nato in Afghanistan were now likely to withdraw this year as planned.
The collapse was the fourth for a cabinet led by Balkenende in eight years.
The Labour party, led by Wouter Bos, the former deputy prime minister, appeared to have benefited in the local elections from its stance over Afghanistan.
Bos said: "The Labour Party is back. We were declared dead and buried, but with our struggle, humility and ideals we have come back."
Wilders is due to arrive in Britain on Friday to screen his anti-Islamic film Fitna at the UK parliament.
He was invited to show the film by Lord Rannoch of the UK Independence Party and Baroness Cox, a former Conservative peer.