Prime Minister Hubert Ingraham, who was seeking a second consecutive term, conceded defeat Monday night after exit polls projected a win for the opposition Progressive Liberal Party.
"The Progressive Liberal Party has won the election," Ingraham told supporters at party headquarters. "I want to publicly congratulate (Christie's) party."
Ingraham, who has served in parliament for 30 years, won his seat, but said he would retire anyway and return to private life.
The margin of victory for the Progressive Liberals in the parliamentary elections was not immediately clear. Official results were expected Tuesday.
Thousands of jubilant opposition supporters, many decked out in the party's color of yellow, massed in a park in the capital where he Christie was expected to speak.
Christie served as prime minister from 2002 to 2007. His Progressive Liberals and Ingraham's Free National Movement have dominated political life in the country since it won independence from Britain in 1973.
Ingraham, who had been in power since 2007 and previously led the islands from 1992 to 2002, said before the vote that times have been challenging for residents of the archipelago of 700 islands off Florida's east coast.
The unemployment rate has risen to nearly 15 percent in the country of about 350,000 people and foreclosures have increased. There were a record 127 murders last year, roughly 30 more than the previous year.
When Ingraham defeated Christie's party in 2007 elections, he seized on scandals involving Christie's Cabinet, including the resignation of the immigration minister over claims he fast-tracked the residency application of the late Playboy Playmate Anna Nicole Smith.
During this year's campaign, Christie and his party colleagues asserted that Ingraham's administration had ignored social needs and the long-term growth of the islands' tourism dependent economy.
His party has vowed to safeguard the vital tourism sector, double the nation's investment in education and job training, reduce energy costs and effectively battle crime.
Christie, who was Ingraham's law partner early in their careers, has also said he supports oil exploration in its territorial waters. Ingraham said in April that he opposed oil drilling because a spill would pose a threat to the environment and the tourism and fishing industries. He later backtracked, saying he would consider it under certain conditions.
A new party, the Democratic National Alliance, also fielded candidates Monday in the 38 parliamentary districts but it appeared the party did not win a seat.
Associated Press writer David McFadden contributed to this story from Kingston, Jamaica.
(This version CORRECTS that Ingraham won his seat in parliament but said he would retire and return to private life)