Farage, a driving force behind Britain's decision to leave the European Union, only entered the race last month, a move that caused shockwaves in a Conservative Party that was already far adrift of centre-left Labour.
He was elected in Clacton, an Essex town that had one of highest leave votes in the Brexit referendum in 2016, with a 46 per cent share of the vote, beating the Conservatives.
Meanwhile his party is predicted to win a total of 13 seats.
"There is a massive gap on the centre right of British politics and my job is to fill it, and that's exactly what I'm going to do," he said after being declared the winner.
"Believe me folks, this is just the first step of something that is going to stun all of you."
Farage, a former member of the European Parliament, had failed in seven previous bids to be elected to Westminster.
With nearly half of the results declared, Reform had also chalked up victories in Ashfield in the East Midlands, where the Conservatives were pushed into fourth, and Great Yarmouth in East Anglia, where the Conservatives were relegated to third.
Reform, founded as the Brexit Party in 2018 and renamed in 2022, had not previously won any seat in an election.
Early results in seats won comfortably by Labour showed the party performing strongly, pushing Prime Minister Rishi Sunak's Conservatives into third place in a significant number.
Farage's party aims to shake up British politics as Marine Le Pen's National Rally is doing in France by taking a tough line on immigration, demanding that illegal migrants arriving in small boats from France are sent back.
That would be difficult to achieve, but by focusing on the issue, it has targeted a weak spot for the Conservatives, which have failed to "stop the boats" as promised by Sunak.
The Conservative plan to deport asylum seekers to Rwanda also failed to get off the ground before the election was called.
Polling company Savanta's Political Research Director Chris Hopkins said if the exit poll was right, it would be "dream scenario" for Farage.
"He'll be rubbing his hands with glee," he said. "He's got enough MPs to make a racket in Westminster, and the party he shares the closest political space with could be reduced to a long period of soul searching.
"It could be that Reform UK is second in a huge number of seats."
