Germans are going to the polls in an election which the two main hopefuls say is a fight for the nation's future.
Mr Schroeder says he will quit if he fails to return as chancellor
Conservative Angela Merkel is ahead of Chancellor Gerhard Schroeder in the polls, but may not be able to form her coalition of choice if she wins.
With up to 25% of voters still undecided, the main parties have been campaigning right to the last minute.
The country's sluggish economy, high unemployment and foreign policy have been the election's main themes.
Polls close at 1800 local time (1600GMT).
A provisional result is expected in the earlier hours of Monday.
Mr Schroeder voted in his home town of Hanover but made no public statement. Mrs Merkel cast her ballot in Berlin.
On the eve of polling, she condemned Mr Schroeder's economic record, her central theme.
During his seven-year stint, Germany's jobless total has risen above five million, and remains at more than 11%, she said.
"We will not make false promises about how to get Germany moving again," the physicist from the former communist east said.
"Vote for change because Germany needs a future."
The CDU and SPD have been arguing ferociously over the nature of economic reforms they both say are necessary.
Mr Schroeder defended the labour and welfare changes he has set in motion, saying Mrs Merkel's proposals on tax and labour reform go too far.
He also recalled his opposition to the US-led invasion of Iraq in 2003 and criticised Mrs Merkel for visiting Washington in the run-up to the war.
"She discredited Germany abroad," he said. "And that is indecent."
Mrs Merkel has pledged to repair Germany's damaged relationship with the US.
Although polls give her CDU party a significant lead over Mr Schroeder's Social Democrats (SPD), her hopes of becoming Germany's first woman chancellor may depend on whether she can form a coalition.
Polls suggest the CDU will muster between 41-43% of the 62m-strong vote, and its Free Democrat allies up to 8%.
The SPD polls between 32-34%, while its Green Party allies score about 7% and the Left Party about 8%.
If the Christian Democrats do not get enough votes to rule with the Free Democrats, they may be forced into a "grand coalition" with the SPD.
The election will bring either a clear mandate for change under Mrs Merkel and her allies or the prospect of political stalemate, says the BBC's William Horsley in Berlin.
Mr Schroeder, 61, gambled by calling the election early, feeling he needed stronger backing, correspondents say, and he has steadily cut into the CDU's lead.
"My future is to remain chancellor," he vowed on Saturday, but if he fails he has said he will quit as leader of the SPD.
All the parties urged everyone to use their vote.
"Think about bringing grandma and grandpa with you," Mr Schroeder joked in a hoarse voice, "but only if they're going to vote for the SPD."
In Frankfurt, he told an audience of 18,000 it was "about every vote - even mine".