Cruz built his campaign on old-fashioned, methodical organizing coupled with modern and sophisticated modeling and metrics. Although under fire from his rivals in the late stages of the campaign, Cruz was proving to be a strong vote getter, even with high turnout that was supposed to favor Trump.
Meanwhile, Rubio claimed the prize for exceeding expectations. Aided by a surge of late-deciding voters, the first-term Florida senator ran a very strong third behind Cruz and Trump, vaulting himself into the thick of the early Republican race and separating himself from the other mainstream conservatives competing among one another for supremacy among the establishment candidates.
The Cruz-Rubio matchup is a classic of Republican contests, one seeking to consolidate conservatives and the other favored by the establishment but seeking to appeal across the breadth of the party. The wild card is Trump, who had shown cross-cutting appeal in polls but who fell short in a state with an electorate long tailor-made for someone with appeal to religious conservatives.
Cruz won a plurality of evangelical Christians, his most important constituency, and romped among the approximately four in 10 Iowa Republicans who called themselves very conservative. Rubio, however, won a plurality among those who considered themselves somewhat conservative, a constituency that in past Republican nomination battles has been of critical importance.
Exit polls told a tale of two parties, with Republicans exhibiting more dissatisfaction and unrest than the Democrats.
More than six in 10 Republicans who attended the caucuses described themselves as evangelical Christians, a slightly higher percentage than four years ago. About four in 10 said they were "angry" with the way the federal government is operating. Almost half said they wanted a nominee from outside the political establishment, compared with four in 10 who said they preferred someone with political experience.
Among Democrats, about two-thirds of caucus attendees described themselves as liberals with about three in 10 saying they are very liberal. Both are about 10 points higher than in 2004 and 2008. About three in 10 said they prefer the next president to pursue an agenda that is more liberal than President Obama's, but six in 10 said they want the next president to continue those policies.
A campaign that seemed to begin in a predictable way a year ago, with Clinton seemingly facing only nominal opposition and a stable of Republican governors jockeying for dominance, was by the summer a campaign turned upside down, thanks to the candidacies of Trump and Sanders.
The atmosphere was shaped by the long shadows of the economic collapse of 2008, political dysfunction and gridlock in Washington, and by the all-too-recent terrorist attacks in Paris and San Bernardino, Calif. Together they created a backdrop of anger and anxiety, stoking fears about the future.
The prelude to Monday's caucuses was anything but conventional. Instead it was a months-long first act that was as tumultuous as it was confounding, all of which caught many political strategists - and some candidates - by surprise.
Thanks also to Trump, the campaign became of running reality TV show. Record numbers of people watched the candidate debates, while Trump and Sanders drew thousands and thousands of people to their rallies. On cable television and online, the campaign generated a running national conversation.
Trump's candidacy gave voice to the anger and disaffection within the country that has been building for several years. His harsh attacks on illegal immigrants and his promise to build a wall on the U.S.-Mexico border were about more than immigration. They were emblematic of the feeling among many Americans that the country is sliding away from traditional virtues and values.
His message pledging to "make America great again" was an indictment of the status quo in whichever ways voters chose to interpret it. Whether it was the economic struggles of the middle class, fears about growing demographic diversity and cultural tolerance or disgust with politicians, Trump's broadsides drew an instant and powerful reaction.
Trump's candidacy also symbolized disgust with conventional politicians and Washington politics. For many voters, a rich businessman with no political experience had special appeal. Coupled with early support for Ben Carson and Carly Fiorina, the Republican race for a time was described as the year of the outsiders.
Having lost the first contest of the year, the question is what kind of candidate Trump will become. He attacked Cruz relentlessly in Iowa, questioning whether he was eligible to be president because Cruz was born in Canada to an American mother. But Cruz's supporters proved loyal in the face of those attacks.
Cruz stepped into the role of outsider as well - a Washington politician but one who made his reputation battling the establishment in the capital, including the leaders of his party. More than any of the other elected officials in the Republican race, Cruz understood the frustrations of grass-roots activists, particularly tea party supporters and religious conservatives.
Sanders's candidacy took root in the frustrations on the left. His populist attacks on big banks and Wall Street executives who had escaped prosecution after the 2008 financial collapse instantly resonated with the party's liberal wing.
Sanders also struck a chord with his attacks on the role of money in politics, railing against the power of super PACS and the influence of billionaires on campaigns and the legislative process. Fueling his campaign with a record number of individual donations, he was able to remain competitive with Clinton in the hunt for cash, despite her extensive fundraising network.
Clinton promised to reform the campaign finance system - with a constitutional amendment if necessary - but it was Sanders who capitalized most on the anger over money in politics.
Iowa Results
Republicans (99.9 per cent reporting)
1 Ted Cruz
51,649 votes, 27.7 per cent, 8 delegates
2 Donald Trump
45,416 votes, 24.3 per cent, 7 delegates
3 Marco Rubio
43,132 votes, 23.1 per cent, 6 delegates
4 Ben Carson
17,393 votes, 9.3 per cent, 2 delegates
5 Rand Paul
84478 votes, 4.5 per cent, 1 delegate
Democrats (99 per cent reporting)
1 Hillary Clinton
693 state delegate equivalents, 49.8 per cent, 28 delegates*
2 Bernie Sanders
691 state delegate equivalents, 49.6 per cent, 21 delegates*
3 Martin O'Malley
8 state delegate equivalents, 0.6 per cent, 0 delegates
* Includes super delegates