South Ossetians are treating the vote as a celebration
Officials in the tiny former Soviet region of South Ossetia say more than 90% of voters have declared they want independence from Georgia.
The authorities see Sunday's referendum as a first step towards eventual union with Russia, but the result is unlikely to be recognised by any government.
South Ossetia has sought secession since the early 1990s but has failed to win international recognition.
Georgia terms the vote illegitimate and has vowed to win South Ossetia back.
The BBC's Matthew Collin in the region's capital, Tskhinvali, says the vote has further strained relations between Georgia and Russia.
In a statement on Monday the European Union said it did not recognise the referendum, which "contradicts Georgia's sovereignty and territorial integrity within its internationally recognised borders".
The European human rights watchdog, the Council of Europe, denounced the referendum as "unnecessary, unhelpful and unfair".
Meanwhile, Georgian Prime Minister Zurab Nogaideli told Reuters that the vote "can only increase the tensions in the region".
South Ossetian President Eduard Kokoity, who wants union with Russia, was re-elected with an overwhelming majority, the officials said.
Population: About 70,000
Major languages: Ossetian, Georgian, Russian
Major religion: Orthodox Christianity
Currency: Russian rouble, Georgian lari
"We have won together today," he told a crowd of supporters in Tskhinvali after the polls closed.
"When we're together and united, no-one can defeat us."
Earlier he appealed to the international community to accept the will of his people, insisting the referendum was not a futile gesture.
"It's not a symbolic referendum, it's an answer to those who won't recognise the will of the people of South Ossetia," he said.
But people in some of the ethnic Georgian enclaves, which lie within South Ossetia, voted in what they described as alternative elections, which seemed designed to undermine the credibility of the referendum on independence.
Earlier, South Ossetian forces killed four men they said were planning to carry out attacks on election day.
Georgia has accused Russia of backing South Ossetia's ambitions to undermine its pro-Western government.
Georgia wants the Russian peacekeeping troops in South Ossetia to be replaced by an international force.
But the South Ossetians see them as protection against what they believe are Georgian plans to invade.
South Ossetia began its attempts to gain independence at the fall of the Soviet Union in the early 1990s, when hundreds died in fighting between Georgian and Ossetian forces.
Many in South Ossetia see Georgia's actions then as brutal and unforgivable.
Since then the region has effectively run its own affairs with economic and political support from Russia.
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