Chancellor Angela Merkel's centre-left opponents have won a narrow victory in elections in the German state of Lower Saxony.
The Social Democrats and the Greens won a single-seat majority in the state legislature, a region of eight million people in north-western Germany.
The election is seen as a bellwether for national elections in September.
The Lower Saxony defeat has set alarm bells ringing for the chancellor, says the BBC's Steve Evans in Berlin.
Mrs Merkel's CDU coalition has lost a number of state elections as she seeks a third term as Germany's chancellor.
Scottish rootsSunday night's knife-edge finish saw the SPD and Greens winning a combined 46.3% of the vote to the centre right's 45.9%.
The results show a fall in support for the Christian Democrats, despite Chancellor Merkel's prominence as a campaigner for them. There was a rise in support for the two main opposition parties, the Social Democratic Party and even more so for the Greens.
If these results were replicated in the federal elections in September, Chancellor Merkel's government in Berlin would be threatened.
Germany is a coalition system so permutations matter.
In Lower Saxony, the CDU remains the biggest party, but with a cut in support that puts it out of office. If its support were to fall similarly in the national elections, it might still be able to retain power but in a different coalition from the current one, perhaps even with the main opposition party, the SPD.
Mrs Merkel remains the most likely Chancellor of Germany after the national elections later this year - but she can't count on it. She has a fight on her hands.
David McAllister, the incumbent leader of Lower Saxony's government and close ally of Chancellor Merkel, had been hoping for re-election.
He was born in Berlin to a German mother and a Scottish father and is seen as a possible successor to Chancellor Merkel as CDU leader.
The Social Democrats (SPD) enjoyed a comfortable lead over the incumbents in the run-up to the poll, but it evaporated as polling day approached.
The SPD leader in Lower Saxony, Stephan Weil, said before the result that a victory in the state polls was a sign that his party would be taken seriously in September's national elections.
Since Mrs Merkel's re-election as chancellor in 2009, the CDU has suffered setbacks in recent state elections, and has lost power to the SPD and Greens in four other states.
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