The PD won 41.4 per cent against 22.4 per cent for the M5S and 15.7 per cent for former prime minister Silvio Berlusconi's Forza Italia party, according to a projection based on 20 per cent of ballots counted.
"This would make the PD the biggest party among European socialists and democrats," Deborah Serracchiani, deputy head of the party, said at a press briefing at its headquarters in Rome.
"It means that people have understood what the government is doing with the reforms," she said.
Stefano Menichini, editor of the leftist Europa daily, said: "The Party of European Socialists will have to look to Italy for a lead after their defeat".
Grillo's "political bet of weakening the Democratic Party has failed", he said.
An exit poll conducted by Piepoli Coesis for the ANSA news agency showed the PD scoring between 29.5 and 32.5 percent, compared to firebrand ex-comedian Beppe Grillo's M5S with 25 to 28 per cent.
Another poll by the Emg Institute gave the PD 34.5 per cent, M5S 25.5 per cent and Forza Italia 17 per cent. In a third poll by IPR Marketing, the PD scored 30.5-33, M5S 26-29 and Forza Italia 16.5-19.5.
The elections were being seen as an important electoral test for Renzi's government, which was installed after he ousted his centre-left predecessor Enrico Letta earlier this year without an election.
It has called for a referendum on euro membership and for the scrapping of EU debt reduction targets.
Ballots closed in Italy at 2100 GMT and turnout was given at around 56 per cent with more than half of ballots counted -- compared to 65.64 per cent in the last European Parliament elections.
