One exit poll indicates that a former top Communist official may win a European Parliament seat, a sign of just how much the political landscape looks set to change.
Alfred Rubiks of the Harmony Centre party resisted Latvian independence from the Soviet Union in 1991 and later spent three years in jail for backing a coup to unseat the new government.
In local elections for the capital Riga, another opposition party and a new party which is a junior member of the ruling coalition also did well, while two ruling government parties, including the largest, lost all their seats.
"In Riga it is clear that Latvians punished the government parties," said political commentator Karlis Streips.
The elections took place amid voter anger at several of the ruling parties due to soaring unemployment and an economy set to contract by up to 20 percent this year. In January Latvia was hit by a wave of riots, the worst in post-Soviet times.
Fears the crisis could cause Latvia to devalue its currency sparked market jitters last week in Eastern Europe and Sweden, although the government denied devaluation plans. With results in from 119 of 158 polling districts, Harmony Centre had 33 percent of votes in local elections, a sharp backlash against Latvian nationalist parties.
From 1991 Latvia introduced strict citizenship laws, effectively leaving many Russian speakers without citizenship and the vote.
Now Harmony Centre looks to be making ground, since many Russians have become naturalised to attain Latvian citizenship, and others born after independence are now at voting age.
Harmony has said it also expected ethnic Latvians, angry at the economic crisis, to vote for it too.
Some pollsters have said the votes could affect the coalition's stability. The prime minister played this down.
Valdis Dombrosvskis said the main worry for the government was tough budget cuts needed to win further funds from a 7.5 billion euro rescue package agreed with the International Monetary Fund (IMF) last year.
Of the five parties in the ruling coalition, Dombrovskis' New Era was set for a similar number of seats as now.
But the largest party in the coalition, the People's Party, and the junior coalition party, the nationalist For Fatherland and Freedom, lost their seats in Riga, though People's Party retained some key cities in the regions.
(EurActiv with Reuters.)