With two thirds of precincts reporting, Fox News, CNN and other news outlets called the race for former Alabama state chief justice Roy Moore, who was leading incumbent Luther Strange by 56.5 per cent to 43.5 per cent.
Strange was appointed to the US Senate earlier this year to fill the seat vacated by Jeff Sessions, whom Trump picked to be his attorney general.
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It also signals that many in the grassroots conservative movement that helped propel Trump to the presidency are still fighting against the Republican leadership and its grip on Washington politics.
Moore hailed his win as a "conservative victory" for his state.
"Because of you, tonight, the establishment has been DEFEATED in Alabama!" he posted on Twitter.
Moore becomes the heavy favorite in Alabama's special election to be held in December against Democratic nominee Doug Jones.
Alabama, in the heart of the Deep South, has become the latest political battleground over the direction that the Republican leadership is taking the party in Washington.
Despite Strange's loss, Trump remains popular in the state. He won Alabama by 28 points last year.
In a political twist, the race was the stage for a proxy war of sorts between Trump and his recently ousted White House chief strategist Steve Bannon, who backed Moore.
Former vice presidential nominee Sarah Palin has also stumped for Moore, while current Vice President Mike Pence made a futile election-eve campaign appearance with Strange.
Trump was hoping to win a loyalist in Strange, 64, who has openly backed Trump's agenda.
But Trump's conservative base has signaled for months that it is not beholden to Republican leaders in Washington, and they could even break with the president in the Alabama race.
Trump hedged his bets on Friday, suggesting in a campaign appearance in Alabama that he "might have made a mistake" in endorsing Strange over Moore.
"If his opponent wins, I'm going to be here campaigning like hell for him" in the general election, Trump said.
Moore has threatened to upend the Republican Party should he win the race, and has branded his opponent an "establishment lackey" to Senate Majority Leader Mitch McConnell.
He is a fierce enemy of McConnell, accusing him of rejecting conservative efforts to pull the agenda further to the right.
Moore is the more Trump-like of the candidates: opinionated, unconcerned about whom he may offend and desperate to upend the elite system that rules the US capital.
"For whatever reason, God has put me in this election at this time, and all the nation is watching" the Alabama race, Moore said Monday night in his final campaign rally before the primary election.
Bannon, who campaigned with Moore on Monday, joined in the Washington bashing, saying party elites think Alabama voters are nothing but "a pack of morons" who will follow the herd.
Alabama has not elected a Democrat to the Senate in a quarter century, so Moore is expected to become Alabama's next senator.
The 70-year-old was twice suspended from the Alabama Supreme Court for refusing to issue marriage licenses to same-sex couples and fighting against orders to remove a 10 Commandments monument from the court house.
His defiance made him a local hero to many, and that anti-establishment streak was on display Monday, when Moore, wearing a cowboy hat and vest, pulled a small pistol from his pocket and showed it briefly to the crowd to show his support for gun rights.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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