The ÖVP went down nine percentage points to around 42 percent. It now has to look for a coalition partner in Vorarlberg. Party boss Markus Wallner has said he will hold talks with the right-wing Austrian Freedom Party (FPÖ), which got just over 23 percent.
Die Presse newspaper reports that a coalition with the Greens seems most likely. The environmental party won around 17 percent of votes - its best ever result in Vorarlberg.
The Social Democrats (SPÖ), recorded one of its worst results since 1945 with around nine percent, according to state broadcaster ORF. The result is viewed as a signal of voter dissatisfaction with the two ruling coalition parties.
Vorarlberg is the first of four more upcoming regional polls and a test for the coalition partners, the SPÖ and ÖVP, which have dominated government for 70 years.
The Neos group, which burst into parliament last year, won around seven percent. It stands for a slimmer state and opposes Austria's convention of distributing the majority of public posts between the Social Democrats and the People's Party.
The Neos leader, Matthias Strolz, is from Vorarlberg and is known for an alternative lifestyle which includes yoga and spending days fasting in the Vienna woods to deal with stress.