Results from Elections Newfoundland and Labrador for Wednesday's race had businesswoman Cathy Bennett winning the riding of Virginia Waters by a narrow margin over the second-place Tories, with the NDP finishing a distant third.
The Progressive Conservatives had held the riding since 2003.
Bennett defeated St. John's city councillor Danny Breen of the Progressive Conservatives and NDP hopeful Sheilagh O'Leary, a former municipal councillor in the city.
The riding became vacant after former premier Kathy Dunderdale quit politics and resigned her seat on Feb. 28.
Elections Newfoundland and Labrador's unofficial vote tally had the Liberals with 1,932 votes, just 40 more than the Tory total of 1,892.
The NDP took 1,021 votes.
Elections Newfoundland and Labrador issued a news release saying just over 49 per cent of the 9,853 eligible voters cast a ballot in the byelection.
Don Mills, the president of Corporate Research Associates, said in an interview the Liberals will be pleased to take a long-time Tory seat, but the Conservatives are showing they remain competitive.
"It's a positive for the Liberals for sure and an indication they are legitimately a party in waiting to take over the government," said Mills.
However, he also said the narrow margin shows the Tories remain competitive in the riding.
"I think despite the loss ... it may be encouraging to them it was such a closely fought battle."
With Virginia Waters a Liberal seat, the Progressive Conservatives have 33 seats in the legislature compared to 12 Liberals and three New Democrats.