Obama appeared before thousands of cheering Democrats to the beat of Stevie Wonder's "Signed, Sealed and Delivered" after securing a strong electoral lead, although he just eked out victories in key states.
He congratulated his opponent Mitt Romney and said, "In the weeks ahead I am looking forward to sitting down with Gov. Romney to discuss how we can move this country forward."
Click HERE to watch President Obama's full acceptance speech.
In a victory speech studded with the soaring rhetoric that first drew voters to him in 2008, Obama reminded the electorate what was still on his agenda -- immigration reform, climate change and job creation.
"Tonight, you voted for action not politics as usual." he told supporters in Chicago. "You elected us to focus on your job, not ours."
Obama told Romney supporters that "I have listened to you… you have made me a better president."
He added, "I return to the White House more determined, more inspired than ever."
The election is a validation, if not an overwhelming mandate, in support of the president's policies of the last four years, which included a major overhaul of the healthcare system and a drawdown of troops in Iraq and Afghanistan.
Chris Carlson/AP Photo
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He thanked those who voted "whether you voted for very first time, or waited in line for a very long time -- by the way we have to fix that," he joked.
He thanked Vice President Joe Biden, whom he called "America's best happy warrior" and first lady Michele Obama.
"Sasha and Malia," he said addressing his two daughters. "You're growing up to be two strong, smart, beautiful young women…I'm so proud of you. But I will say for now, one dog is probably enough," he said riffing on his promise of a puppy four years ago.
Prior to the president's speech, Mitt Romney conceded gracefully in Boston.
"I so wish that I had been able to fufill your hopes....but the nation chose another leader," Romney told heart broken supporters at his Boston headquarters.
"I pray the president will be successful in guiding our nation," Romney said before running mate Rep. Paul Ryan of Wisconsin and their families joined Romney on the podium.
Obama's lease on the White House was renewed with a crucial victory in Ohio.
Celebrations erupted in Obama's home town of Chicago, in New York's Time Square and outside the White House, while Romney's Boston headquarters went mournfully quiet.
"We're all in this together. That's how we campaigned, and that's who we are. Thank you," Obama tweeted even before formally announcing his victory.
Nevertheless, it was a squeaker. In Florida and Virginia, states that were key to both candidates, Obama and Romney were separated by a single percentage point. Ohio also was close, with the candidates also separated by a point late into the vote count. And the popular vote was nearly split evenly down the middle nationally.
With counting still going on and before Florida had been called, Obama led with a significant electoral lead, 303 votes 203.
After a campaign for the White House and both houses of Congress that cost more than $6 billion, the make up of all three branches remains very much the same as it was before the election. Obama remains in the White House, Democrats retain control of the Senate and Republicans continue to control the House.
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