With 71% precincts reporting as of early Wednesday morning, Buttigieg had 26.8% of state delegate equivalents, followed by Vermont Sen. Bernie Sanders at 25.2%, Massachusetts Sen. Elizabeth Warren with 18.4% and former Vice President Joe Biden at 15.4%.
The results are a milestone for Buttigieg, the 38-year-old who has vaulted from a relatively obscure mayor to become the first gay candidate to seriously contend for a major party's presidential nomination.
Buttigieg choked up Tuesday night as he reflected on his position in Iowa after the first 62% of precincts' results were released after nearly 24 hours of delays.
"It validates for a kid somewhere in a community wondering if he belongs or she belongs or they belong in their own family that if you believe in yourself and your country, there is a lot backing up that belief," Buttigieg said.
His position well ahead of the two other leading moderate contenders, fourth-place Biden and fifth-place Minnesota Sen. Amy Klobuchar, could give Buttigieg momentum headed into next week's New Hampshire primary.
Sanders, meanwhile, showed he remains the preference of progressive voters, leading third-place Warren ahead of next week's showdown in a state that neighbors the homes of both senators.
The results are an alarming failure for Biden, whose campaign fell short of the 15% viability threshold in some precincts. The national front-runner in most polls, whose campaign was built on the argument he is the party's most electable contender, is on course to limp into New Hampshire with a clear loss.
The first Democratic results out of Iowa come hours before President Donald Trump is set to deliver his State of the Union speech.
It came after a full night of chaos, as an app the Iowa Democratic Party planned to use for precinct chairs to report results encountered trouble.
Prior to the initial release of results, the chair of the state Democratic Party, Troy Price, apologized for the delay in the caucus results of the Iowa, saying there was a problem with the "back end" in reporting the data but ensuring that the data itself was accurate.
"The reporting of the results and circumstances surrounding the 2020 Iowa Democratic Party caucuses were unacceptable. As chair of the party, I apologize deeply for this," Price said.
"The bottom line is that we hit a stumbling block on the back end of the reporting of the data, but the one thing I want you to know: We know this data is accurate," he said.
Democratic National Committee Chairman Tom Perez called on the maker of the app to provide a full accounting of what went wrong.
"What happened last night should never happen again. We have staff working around the clock to assist the Iowa Democratic Party to ensure that all votes are counted," Perez said. "It is clear that the app in question did not function adequately. It will not be used in Nevada or anywhere else during the primary election process. The technology vendor must provide absolute transparent accounting of what went wrong."
The final outcome of the Iowa Democratic caucuses remains unknown, after a night of confusion and chaos rocked the critical first-in-the-nation 2020 contest.
Hours after caucusing began in Iowa on Monday, local officials raised concerns about the vote reporting, raising difficulties in using the new app to report their results and complaining about long hold times to report results by phone.
On Tuesday, the candidates had already moved on to New Hampshire, the next state on the 2020 calendar -- as they tried to spin the lack of results in favor of their own campaigns.
A Democratic source told CNN that the issue seemed to lie with a major coding error in the app that was discovered once data started flowing into the Iowa Democratic Party. Party officials began to see discrepancies in the three data streams: how voters had first aligned with candidates at their caucus sites; the final alignments after those short of 15% support were eliminated at each site; and the state delegate equivalents won at each site.
The source said that it took time for party officials to identify the issue, and noted that there was not a problem with the raw data that was being put in by individual precincts.
Some candidates complained about how Iowa Democrats handled the release of data after the long delays.
Warren told reporters in New Hampshire on Tuesday that the Iowa Democratic Party should have just waited and released it all at once.
"I just don't understand what that means to release half of the data," she said after a Keene town hall. "So I think they ought to get it together and release all of the data, that's what we need."
At the town hall, she characterized the race as a "a tight, three-way race at the top."
Sanders' campaign emphasized the popular vote figures, which showed that with 62% of precincts tallied, Sanders was narrowly outpacing Buttigieg.
"We want to thank the people of Iowa. We are gratified that in the partial data released so far it's clear that in the first and second round more people voted for Bernie than any other candidate in the field," top Sanders adviser Jeff Weaver said in a statement.
At his first New Hampshire campaign stop, Biden seemed relieved to move on from Iowa.
"God, it's good to be in New Hampshire," Biden said as he began his speech in a Girls Inc. gym in Nashua. "You have no idea how happy we were to be headed to New Hampshire and Nashua."
Biden's campaign has been most aggressive in challenging the legitimacy of the results in Iowa due to the long delays. In a letter to the state party Monday night before the first phone call with campaigns, Biden's general counsel Dana Remus wrote that "the campaigns deserve full explanations and relevant information regarding the methods of quality control you are employing, and an opportunity to respond, before any official results are released." That did not appear to have happened.
Kate Bedingfield, Biden's communications director, told CNN's John Berman on Tuesday morning, "We have real concerns about the integrity of the process, and I think there were some significant failures in the process last night that should give voters concern."
"If you have a process where you can't be confident that the results that are being reported are reflective of the votes that people cast last night in the process, that's a real concern," Bedingfield said.
Klobuchar, campaigning in Portsmouth, New Hampshire, said she is happy to no longer be tied to Washington for Trump's impeachment trial, as she, Warren and Sanders were in many of the closing days in Iowa.
"I will be at an even playing field," she said. "Because I am in New Hampshire, and I want you guys to help me, vote for me and that is how we will win, not just in the primary but in November."