Five years of Plaid Cymru rule in much of Labour's traditional south Wales valleys heartlands were swept away.
Valley areas turned back to Labour, after deserting it five years ago
While the party made gains in other areas it lost the two key valleys seats of Rhondda Cynon Taf and Caerphilly.
Plaid president Dafydd Iwan said perhaps it had concentrated on the council - and not on the voters.
Assembly member Leanne Wood said the party had suffered because Labour had poured resources into the valleys - at the expense of other areas.
"We have seen the Labour party getting a kicking throughout the UK and it seems that Rhondda Cynon Taf has bucked the trend," she said.
Plaid's losses in the south Wales valleys virtually mirror its setbacks in the assembly elections last year, when seats spectacularly won in 1999 reverted back to Labour.
But Plaid has also had a leadership contest since then, with Ieuan Wyn Jones resigning as president, only for the leadership then to be split, with Dafydd Iwan becoming president and Mr Jones leading the assembly group.
Leading Plaid figures said they were bitterly disappointed with the result of the vote.
Gwynedd councillor Dafydd Iwan became Plaid president in 2003
Mr Iwan said the party had given "too much priority to the council and not the people - the electors".
"The people have spoken in Rhondda Cynon Taf," he said.
"But even in our worst area, Rhondda Cynon Taf, we still got 33% of the vote - one in every three - so that's a platform to work from".
It was not all bad news for Plaid: it did retain control of Gwynedd in its traditional heartland, with an increased majority, and also became the biggest party in Ceredigion.
Plaid Carmarthen East and Dinefwr MP Adam Price said the party had previously suffered a "wipeout", in a reference to valleys councils such as Rhymney and Merthyr Tydfil it gained and then lost.
Mr Price said his party was in a position to regain Caerphilly at the next election.
"Plaid Cymru made a massive jump back in 1999 and I think the party has taken some time to build its own capacity in parallel with the support it has gained.
"But we haven't fallen back massively - Plaid's consistently getting over 20% at elections."
"Strategically, for the long term, what is important for Plaid is that it becomes a national party that has a long-term view".