Romano Prodi's centre-left coalition has won municipal elections in three of Italy's four major cities, provisional results show.
The voting dashed Mr Berlusconi's hopes of early revenge
The centre-right bloc of former Prime Minister Silvio Berlusconi looked set to win Milan, but by a reduced margin.
The centre-left increased its majority in Rome, Turin and Naples.
Mr Berlusconi - who hails from Milan - had promised a swift comeback for his bloc after narrowly losing the national elections last month.
The BBC's Christian Fraser in Rome says the mayoral and regional elections have reinforced Mr Prodi's hand.
The result will make it easier for Mr Prodi to push through some of the spending reforms he has planned for the bigger cities, our correspondent says.
There was some consolation for Mr Berlusconi, however, as his ally the governor of Sicily, Salvatore Cuffaro, was returned as expected.
Mr Cuffaro had faced a tough challenge from the anti-Mafia campaigner, Rita Borsellino, whose brother Paolo, a magistrate, was murdered by the Mafia in a car bomb in 1992.
Mr Cuffaro is currently on trial for collusion with the Mafia but has always denied the allegations.
Voting took place in 1,200 cities and towns on Sunday and Monday. Turnout was about 71% - some nine points lower than five years ago.
In Rome, Mr Berlusconi's coalition saw its share of the vote slump from nearly 20% in 2001 to 9.9% in the weekend polls.