It was intended to ease tensions after an attempted coup last August.
Incumbent Prime Minister Thomas Thabane’s All Basotho Convention has won 40 out of 80 constituencies with the Democratic Congress taking 37.
Two other parties hold the other three constituencies, meaning a coalition must be formed.
The exact make-up of the 120-member parliament will be announced on Wednesday as 40 seats are allocated proportionate to votes cast – and there were 23 parties participating in total.
But no single party will be able to get the 61 seats needed to rule outright.
Army confined to barracks
Last year’s power struggle polarised Lesotho’s security forces, with the police believed to have sided with Mr Thabane and the army seen as backing his deputy, Mothejoa Metsing.
Mr Metsing’s Lesotho Congress for Democracy party has won two constituency seats, while the Basotho National Party gained one seat.
The army was confined to barracks for the election and the regional bloc Sadc deployed 475 police officers to provide security.
The BBC’s Nomsa Maseko in the capital, Maseru, says there are behind-the-scenes negotiations to form a coalition with the smaller parties holding the balance of power.
On Monday, election observers said the poll was free and fair.
But the head of the African Union mission – Kenyan opposition leader Raila Odinga – said constitutional and legal reforms were urgently needed to define the role of the army, police and opposition to prevent further trouble.
The military’s job was to deal with external threats, but in Lesotho it was playing a completely different role, he said.
Analysts say the constitution needs to spell out what should happen to a coalition government should an MP decide to cross the floor and join another party.
Lesotho is completely surrounded by South Africa, which played a key role in mediating during last year’s political crisis.
It started when Mr Thabane suspended parliament to avoid a motion ousting him as the head of the coalition.
He later fled, saying he was the target of a coup attempt, after the military attacked the police headquarters.