In another closely watched race, former Clinton aide Rahm Emanuel won the Democratic nomination for a Chicago congressional seat after an expensive campaign marred by allegations of anti-Semitism.
Blagojevich narrowly won the Democratic nomination in Tuesday's primary, relying on union support in southern Illinois to make up for a lack of votes in suburban Chicago.
At his victory party, Blagojevich took the stage to the strains of Elvis Presley singing "That's Alright" and pointed out that a Democrat hasn't won the Illinois governor's seat since 1972.
"For 25 years, 25 long years, the Republicans in Springfield have sold us short and sold us out," he said. "I don't know about you, but I say it's time for a change."
With 98 percent of precincts reporting, Blagojevich had 449,981 votes, or 37 percent; former Chicago schools chief Paul Vallas had 424,220 votes, or 34 percent; and former state Attorney General Roland Burris had 356,851 votes, or 29 percent. Vallas conceded just after midnight.
On the Republican side, Ryan - who is not related to the governor - had 396,142 votes, or 45 percent; state Sen. Patrick O'Malley had 253,217 votes, or 29 percent; and Lt. Gov. Corinne Wood had 238,376 votes, or 27 percent.
"This has been a tough and sometimes disappointing primary campaign, but it's time to move on," Ryan said. "We're going to take our state in a new direction."
Illinois is one of 36 states holding elections for governor this year and one of 17 states in which the incumbent is not running. Democrats are hoping a bribery scandal that haunted Gov. Ryan will help Blagojevich win Nov. 5.
On Chicago's North Side, Emanuel emerged victorious from a hard-fought battle with former state Rep. Nancy Kaszak. He should have the edge this fall in the heavily Democratic district left open when Blagojevich, who is serving his third term, decided to run for governor.
"I feel great, but most importantly I'm humbled and honored," Emanuel said. "It's moments like this that you remember all the good and all the bad but also all the strength you got from people and why you did this."
With 98 percent of precincts reporting, Emanuel had 45,908 votes, or 50 percent. Kaszak had 35,111 votes, or 39 percent. Six other candidates, including another former Clinton aide, Pete Dagher, were far behind.
The candidates for governor all hoped to capitalize on the misfortune of Gov. Ryan, whose popularity plummeted amid a federal investigation into the swapping of driver's licenses for bribes, which occurred mostly when Ryan oversaw license bureaus as secretary of state.
Prosecutors say $170,000 in bribe money ended up in the governor's campaign fund, though he has not been charged with wrongdoing. Even so, the Republican candidates spent much of their time trying to distance themselves from the Republican governor.
In the campaign for the 5th Congressional District, which runs from Lake Michigan to O'Hare airport, Emanuel, 42, sought fund-raising help from former President Bill Clinton and Kaszak, 51, called him a Washington outsider.
The race took a nasty turn two weeks ago after a supporter of Kaszak suggested that Emanuel, who is Jewish, was a citizen of Israel and served for two years in the Israeli army. He called Emanuel a "millionaire carpetbagger who knows nothing about our values."
The comments about Emanuel's background are not true and Kaszak repudiated the remarks. But Emanuel said the remarks reflected a "whispering campaign" of anti-Semitism against him in the district.
By Nicole Ziegler Dizon