The ballot was dominated by concerns over rising living costs and wars in Ukraine and Gaza.
Incumbent Prime Minister Jonas Gahr Stoere's Labour and four smaller, left-leaning parties won 87 seats, above the 85 needed for a majority, with 99 per cent of ballots counted.
Stoere, 65, will remain heavily reliant on his smaller allies, however, to pass major legislation such as fiscal budgets.
To get their backing, he will likely face tough discussions over issues such as tax hikes for the wealthy, future oil exploration, and divestments by Norway's $US2 trillion ($A3 trillion) sovereign wealth fund from Israeli companies.
"Stoere will continue as prime minister, but with a much more difficult parliamentary situation, in which he is dependent on five parties to govern," Jonas Stein, an associate professor in political science at the University of Tromsoe, told Reuters.
Despite the left's victory, Monday's ballot showed a shift further to the right among conservative voters, with the populist, anti-immigration Progress Party of Sylvi Listhaug, 47, making its best-ever showing in an election.
Progress secured 48 seats in the 169-seat parliament, more than double its allocation from four years ago, as the party's promise of large tax cuts appeared to have resonated with many voters.
Listhaug, who cites Ronald Reagan and Margaret Thatcher as her role models, campaigned on what she said was wasteful public spending on areas such as international aid and subsidies to green energy.
"Young people today are much more right-wing than earlier. I think the Progress Party has won a huge part of the youth vote, especially among young men," said Eirik Loekke, a fellow at Civitas, an Oslo-based liberal think-tank.
None of the right-wing parties that won seats, including former prime minister Erna Solberg's Conservatives, have sought the backing of US President Donald Trump, unlike some of their counterparts elsewhere in Europe.
Stoere welcomed the results, playing down any shift to the right. "This is a signal to outside Norway that social democracy can also win despite a right-wing wave," he told a jubilant crowd of Labour supporters chanting "four more years".
Voter concerns over the conflict in Ukraine and an aggressive Russia, which shares a border with Norway in the Arctic, have given a boost to the left in recent months after former NATO Secretary-General Jens Stoltenberg, 66, joined Stoere's cabinet.
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