Cantor conceded the race with 97% of precincts reporting from the Richmond-area district, Cantor trailed Dave Brat 56% to 44%, according to the Virginia Secretary of State's website. Turnout was low.
"Obviously we came up short," Cantor said in his concession speech.
"It's disappointing sure but I believe in this country. I believe there is opportunity around the next corner for all of us," he said.
Mark Preston, CNN's executive political editor, said a defeat for Cantor would have national implications since he has been viewed as a potential speaker.
"This came out of nowhere," Preston said.
CNN Political Analyst David Gergen called it an "earthquake" that would "send shockwaves through the Republican ranks."
CNN Chief Congressional Correspondent Dana Bash said the outcome will reenergize the right and disrupt attempts to bridge gaps between arch conservatives and establishment Republicans in Congress.
It could also cloud any prospects the White House and moderates might have for any legislative gains, Bash said.
"This will throw it all up in the air," Bash noted.
CNN Crossfire host Newt Gingrich credited that a large part of Cantor's constituency in Virginia's reliably conservative 7th Congressional District concluded that he wasn't listening and rose up to toss him out.
Cantor, he said, had a "great record" and was a hard worker in Congress. He added that Cantor was extremely smart and could still have a bright political future.
Brat is an economics professor at Randolph-Macon College outside Richmond.
Most Republicans view Cantor, 51, as the most conservative member in the House leadership lineup.
He was President Barack Obama's chief foil in budget negotiations in 2011, a role he proudly points out during this campaign season.
In a phone interview with CNN on Monday, Brat argued that Cantor was more attentive to donors in New York and California and big business groups than he is to enacting an agenda based on Republican ideals.
"While he's got an eye on the speaker job, he's turned his back on his constituents," Brat said.
He noted that Cantor and other GOP leaders have dropped their free market principles and not done enough to address looming deficit problems.
Brat attempted to frame his challenge as another case of a grassroots conservative taking on the GOP establishment, a major theme in Republican contests this year.
He has tried to make immigration reform the central issue, and said Cantor's position would hurt the economy.
Brat said Cantor's campaign ads have actually helped elevate his name ID and predicted he would win.
"On Tuesday you're going to have a shock on your hands," he predicted
Brat will meet Democrat Jack Trammell in November, also a professor at Randolph-Macon. Trammell was nominated at a party convention.