With 49 percent of precincts reporting, Manchin led with nearly 54 percent of the vote, compared with about 43 percent for Raese.
Raese cast the race as a referendum on President Barack Obama, while the popular governor stressed the record that helped him coast to re-election two years ago.
Manchin will serve the final two years of Byrd's term. The 92-year-old Byrd, the longest-serving senator in U.S. history, died in June.
Raese, who previously ran twice for Senate and once for governor, had joked his values are more conservative than those of the tea party. He had claimed his ideas about bloated government, unfair taxes and overregulation of industry would resonate with voters.
Raese built his campaign around a single line — "I won't be a rubber stamp for Barack Obama" — and stayed on message in nearly every campaign appearance, interview and ad.
The National Republican Senatorial Committee paid for an ad showing men in flannel shirts and baseball caps worrying that Manchin would side with Obama — but ended up pulling it after it was revealed that the casting call used to hire the actors had sought "a 'Hicky' Blue Collar look." The NRSC fired a Republican production firm over the wording, but not before wrongly blaming the gaffe on the casting firm. Raese denounced the ad and said his campaign had nothing to do with it.
On the other hand, Manchin — widely credited with keeping the state fiscally sound even as others struggled — ran on his reputation.
Descended from a family of well-regarded Democrats whose name has been known for generations, he has the support of diverse groups, from the United Mine Workers and the West Virginia Coal Association to the National Rifle Association and the state and national chambers of commerce.
And after two mine disasters that killed a total of 41 men, Manchin is known even among those who don't follow politics as a calming and compassionate presence in a time of crisis.
In one effort to set himself apart from other Democrats, Manchin took up a hunting rifle in one ad to show voters in his coal-mining state how much he opposes his own party's climate change legislation. He fired a shot into a target labeled "Cap and Trade Bill" and vowed to repeal what he calls "the bad parts of Obamacare."
West Virginia governors have mostly lost when running for the Senate. Of the four who previously tried, only Sen. Jay Rockefeller succeeded. Rockefeller has held the state's other Senate seat since 1985, and both seats have been held by Democrats since Byrd entered the Senate in 1959.
Manchin will be replaced as governor by Senate President Early Ray Tomblin, a 58-year southern West Virginia Democrat who is the state Senate's longest-serving president.