With official results still hours away, Koizumi said late Sunday that it appeared the LDP had won a lower house majority in its own right. The leader of the main opposition party conceded defeat and then said he was stepping down.
"I had hoped we would win a majority with our party alone, but we did even better than that," Koizumi said. "I believe it was important to hear the people's voice."
Public broadcaster NHK and several commercial networks said exit polls indicated the Liberal Democrats stood to win as many as 309 of the powerful house's 480 seats, 60 more than it held before Koizumi dissolved parliament last month. TBS, another network, said the LDP would win 307 seats.
The main opposition party, the Democrats, was expected to win 104 seats, a devastating plunge from its previous 175 seats, NHK said.
The Kyodo News agency says the LDP was assured of winning a majority.
An official vote count was not expected until Monday morning.
If the polls prove correct, the LDP would be on course for possibly its biggest victory ever in lower house elections. At its peak in 1986, it held 300 of the then-512 seats in the chamber.
In Washington, the State Department congratulated Koizumi and said it looked forward to continuing to work closely with his government, spokeswoman Darla Jordan said.
Koizumi led a vibrant campaign that rejuvenated the long-ruling but staid LDP by positioning the party as an engine of dynamic change, appealing to voters worried about a bloated government weakening efforts to boost a struggling economic recovery.
Shinzo Abe, a senior LDP official, cautioned that the results were preliminary. But he said they suggested the LDP had won a mandate to push ahead with its reform program and a plan to privatize the country's postal system, which has $3 trillion in savings and insurance schemes.
"We made the issue at stake in these elections very clear: whether Japan should go ahead with structural reforms, or stop them," he said. "As a result, we've gained the support of a wide section of the population."
Abe said that even if the LDP won a majority on its own, the party would continue to govern with its coalition partner, the Buddhist-backed New Komei Party.
Koichiro Genba, the Democratic Party's elections committee chief, said the loss indicated by the exit poll results "was more severe than what we had expected."
Voter turnout was at least 50 percent, up nearly 3 percentage points from the 2003 elections, in part because of a dramatic battle over Koizumi's efforts to reform Japan's postal system.
Koizumi, 63, called the elections after defections from within his party scuttled his postal reform bills in the upper house on Aug. 8.
In addition to high turnout at polling stations, absentee ballots also hit a record 8.96 million, or more than 8 percent of Japan's 103.4 million eligible voters. Turnout in 2003 was 59.9 percent, the second lowest since 1947.
After dissolving the house, the prime minister, who sports a silvery mop-top and a passion for opera, kept voters riveted by purging 37 anti-reform lawmakers from his party and drafting celebrity candidates, including a TV chef and an Internet mogul, to run as "assassins" against them.
In the run-up to the elections, Koizumi's battle with the LDP defectors completely overshadowed the Democratic Party, which tried to get voter attention by proposing a pension reform blueprint and sniping at Koizumi's military relations with Japan's top ally, the United States.
Katsuya Okada, the 53-year-old leader of the Democrats, urged the country not to focus solely on postal service reform. He later conceded defeat and assumed responsibility.
"The overall situation has now become clear ... the DPJ has suffered a great setback," Okada said.
"It's clear to everyone that the DPJ can't form a government now. So I'd like to step down as party leader, and a new leader should be selected as soon as possible."
Aside from pushing pension reform, the Democrats oppose Japan's dispatch of troops to support the U.S.-led coalition in Iraq and criticize Koizumi's controversial visits to a Tokyo war shrine, which enrage neighboring Asian countries that say the site glorifies Japan's militaristic past.
The Democrats also have called for repositioning U.S. troops based in the southern Japanese prefecture of Okinawa.
But Koizumi's reform campaign appears to have resonated with a public concerned about how it will pay for future retirees among Japan's aging populace and about wasteful government bureaucracies that need to be streamlined to boost a fragile economic recovery.
Postal savings long have operated as a slush fund for LDP pork-barrel projects blamed for waste and corruption. And postmasters, with their strong networks in the countryside, had been crucial cogs in the LDP political machine for decades.
Many in rural areas, the bedrock of LDP support, fear privatization will reduce services, while the postal workers' union fears job cuts.