The Conservatives have said the party's local election gains are "at the top end" of expectations.
With net gains of 316 seats, the Tories won control of councils such as Crawley, Ealing and Croydon.
On the projected share of the votes if the local polls were held nationwide, the Conservatives were on 40%, ahead of the Lib Dems' 27% and Labour's 26%.
Tory chairman Francis Maude called it a "good" result. But opponents said the Tories had failed in northern cities.
'Change and optimism'
Mr Maude said the result was "at the top end" of predictions, adding: "We are continuing to build our support while Labour's melts away.
"David Cameron's message of change, optimism and hope is in tune with what Britain wants today."
It was the Tories' best local election performance since they last won national power in 1992.
Party leader David Cameron said: "There's plenty more to do, and plenty more change to be made and work to be done, but I think this is a very important step forward."
He added: "I think that we have shown right across the board that where Labour are collapsing, we are building."
There were Tory wins in areas such as Shrewsbury & Atcham, Bassetlaw and Mole Valley.
The party's win in Crawley stripped Labour of control of the town for the first time since the early 1970s.
And the Tories picked up Ealing from Labour in what is seen as a "bellweather seat" for general election prospects.
But in St Albans, Hertfordshire, the Tories lost a seat to the Liberal Democrats on the length of a pencil.
After three recounts in Wheathampstead ward each had 1,132 votes, and the seat was won by the party that picked the longest pencil.
The Tories also lost Gosport to no overall control, with the Lib Dems making gains.
Among the councils the party held were Tamworth in Staffordshire - where it gained five seats from Labour - and Brentwood in Essex, where it gained six seats from Liberal Democrats.
It is the first electoral test for Conservative leader Mr Cameron since he became leader last December.
Liberal Democrat frontbencher Ed Davey said the Tories had failed to make inroads in cities such as Manchester and Liverpool.