The Harmony party, which gets much of its support from the Baltic country's Russian-speaking minority, took 19.9 percent of the votes in the October 6 elections, final results showed.
The Baltic state is a member of both North Atlantic Treaty Organisation and the European Union putting it on the front line of the increasingly tense relationship between the West and Moscow.
The pro-Russia party Harmony, which is supported by ethnic Russians who make up a quarter of the population, took 19.9% of the vote but will find it nearly impossible to be part of any government.
Besides them, the New Conservative Party (13.6%), the party "Development/For" (12%), "National Alliance" (11%), "Union of Greens and Farmers", which is headed by the current Prime Minister Maris Kuchinkis, gained 10%.
Harmony's leader, Nils Usakovs who has been mayor of Riga since 2009, may have the best shot at grabbing power following its decision earlier this year to end a co-operation deal with Putin's United Russia party that had upset other Latvian parties.
More than 1,000 North Atlantic Treaty Organisation troops are based in the Baltic country and even the potential of a minor shift in allegiance in Latvia has set alarm bills ringing in Brussels and Washington.
"The message that the voters have tried to send is that we're going to have some new faces in politics", Janis Ikstens, political scientist at Latvia University, told Reuters.
Since 2016, Kucinskis has led a three-party governing coalition with the national-conservative National Alliance and the liberal Unity parties. But other parties refused to join it in a coalition over suspicions of its links with Moscow, despite its pro-EU stance.
They want stable ties between Latvia and Russian Federation.
Casting his ballot in the eastern town of Rezekne, Aigars Karklins said the prospect of Harmony teaming up with populists was realistic.
More than 1,400 candidates from 16 parties are vying for seats in the country's 100-seat Saeima assembly.
"KPV LV is a "shadow branch" of Harmony, which is not alone in its power quest any more", said political analyst Bendiks.
KPV LV, a populist party led by former stage actor Artuss Kaimins, is a potential coalition partner. A corruption scandal has undermined voters' confidence in the government. The party could win at least 15 seats. Preliminary results will be announced today.