The historic win gives the United States its first black president and brings to a close a campaign season that at times seemed endless.
The event, organized by the Obama campaign, was the culmination of an all-day phone banking effort to get voters nationwide to support the Illinois senator in his bid for the nation's highest office against Arizona Sen. John McCain.
U.S. Rep. Barbara Lee, D-Oakland, addressed the emotional crowd after the announcement was made.
"This night has transformed the political landscape of this country," she said. "Thank you for keeping hope alive."
Oakland Mayor Ron Dellums, who is black, shared with the crowd a story from his childhood, recalling a moment when his mother dreamed aloud of a day when the presidency would be held by someone who looks "like me."
"As a young person, I could not have conceived of this moment," Dellums said. "But it's here; this is the human family. You've elected a man who sees the world as it is."