With votes in from 40 percent of polling stations, Fernandez had 53 percent support, 36 percentage points ahead of her nearest rival, socialist candidate Hermes Binner.
No Argentine leader has won such a big share of the vote since General Juan Domingo Peron was elected for the third time with 62 percent in 1973, and tens of thousands of jubilant Fernandez supporters celebrated.
Fireworks, flags bearing the image of Peron's famous wife Evita and Peronist songs filled the square in front of the pink presidential palace.
"If any one of us had said this was possible two years ago, they would have told us we were crazy," a tearful and ebullient Fernandez, 58, told cheering fans nearby. "You can count on me to go further with this project to improve the lives of 40 million Argentines."
The scale of Fernandez's victory gives her a strong mandate to deepen the unconventional economic policies that play well with voters but irritate investors and farmers.
Generous social spending to expand pensions coverage and child welfare benefits have won her a loyal base of voters.
"We need this victory for wealth to be shared more fairly," said Sofia Belastegui, 42, a teacher who joined crowds of supporters waving blue-and-white flags, letting off fireworks and chanting Peronist party anthems.
Sunday's result marks a dramatic change of fortunes for a leader who some critics once said might have to leave power early as angry protests by farmers and middle-class voters battered her approval ratings soon after she took office.
When her husband and predecessor as president, Nestor Kirchner, died a year ago, many thought it spelled the end of the couple's idiosyncratic blend of state intervention, nationalist rhetoric and the championing of human rights.
Instead, it prompted a wave of nostalgia for the best years of Kirchner's 2003-2007 presidency and sympathy for a woman who suddenly seemed more likable.
A skilled orator fond of glamorous clothes and make-up, Fernandez still wears black as she mourns her husband and closest advisor. His image featured heavily in her campaign.
A splintered opposition and brisk economic growth helped Fernandez turn the sympathy vote into solid support.
Despite double-digit inflation and other signs of strain as global conditions worsen, Argentina's economy is growing at about 8 percent a year and has regained some of its glory as the "breadbasket of the world" as grains shipments rise. Unemployment is at a 20-year low.
Voters with memories of the hyperinflation of the late 1980s and a severe economic crisis 10 years ago have good reason to think things could be worse than they are today.
"Crises come and go here and instability is exhausting because you make plans and they keep going to waste," said Marta Rey, 50, a teacher who voted for Fernandez's Peronist party for the first time on Sunday. "It gives me a certain security for my son and for the future."
'ABSOLUTE RULE'
Fernandez's easy re-election belies fierce opposition to her combative, heavy-handed style -- typical of the Peronist party that has dominated politics for decades.
"It's a complete mess ... the corruption, the inflation, lies, authoritarianism. We've got used to living like this," said Juan Tofalo, 43, a newspaper vendor in Buenos Aires.
Allegations of corruption have stalked the government for years, although there have been no convictions.
A recent crackdown on economists whose inflation estimates double the official rate of a discredited state statistics agency is typical of Fernandez's controversial methods, who some critics say resemble those of Venezuela's Hugo Chavez.
Businesses are routinely strong-armed into price control agreements -- her main weapon against surging prices -- and deals to increase their exports as the trade surplus dwindles.
When a leading newspaper and cable news channel owned by the Grupo Clarin CLA conglomerate criticized her handling of farmer protests, Fernandez hit back. The company was stripped of a key operating license and "Clarin Lies" posters appeared across the capital.
In 2008, at the height of the global financial crisis, Fernandez stunned financial markets by nationalizing private pensions. A year later, she fired the head of the central bank when he refused to hand over foreign reserves to pay debt.
Such measures, coupled with high inflation and lax monetary and fiscal policy are dimly viewed on Wall Street, where economists say Latin America's third-biggest economy could be heading for a hard landing as global conditions sour.
Few analysts think she will change course unless she is forced to by a sharp slowdown in neighboring powerhouse Brazil or lower prices for Argentina's key exports of corn and soy.
Fernandez has outlined few concrete policy proposals, vowing only to "deepen the model."
"We know very little (about her plans)," said Mariel Fornoni, a pollster at the Management & Fit consulting firm. "It's turned into a kind of absolute rule. Cristina decides everything."