US elections 2016, Voting begins in US presidential race,
Voters have begun meeting - or caucusing - across the state in schools, churches and other venues.
With half the Republican votes counted, it appears that there is a three-way fight between Donald Trump, Ted Cruz and Marco Rubio.
Iowa kicks off a state-by-state contest over the coming weeks and months.
The Democratic race is also too close to call, with Vermont Senator Bernie Sanders mounting an unexpectedly strong challenge against the former first lady and Secretary of State, Hillary Clinton.
The third contender in that race, Martin O'Malley, is about to drop out of the contest, sources close to his campaign have told the BBC.
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Campaigning intensified over the weekend as candidates toured the sparsely populated Midwestern state to court undecided voters.
Voting began at 19:00 local time (01:00 GMT on Tuesday) and the final results - a winner from each party - could be named within hours.
This first electoral test is seen as key because victory can boost campaign momentum as other states vote.
Supporters of the main candidates in Iowa gave very different reasons for their backing.
Suzanne Wood said Mr Cruz was someone who "knows how to argue for conservative values", citing his stance on gun rights and religion.
For Julian Raven, an artist and preacher campaigning for Donald Trump, the Republican has the "courage that is required to match up with the existential threats that we face as a western civilisation".
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Iowa has an unusual election system called a caucus, which involves people gathering at private homes, schools and other public buildings across the state.
Democratic voters divide themselves into groups based on their preferred candidate, but the Republican caucus process is more like a traditional ballot.
Turnout could be high, especially with a predicted snowstorm expected to strike after the vote.
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Media captionKatty Kay explains the long and complex process for picking a presidential nominee
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Media captionCan Iowa voters talk about their differences over pie?
The Iowa Republican Party said there could be more votes cast than the record set in 2012, when 120,000 people turned out.
Democrats also expect a strong turnout, though not as many as the 240,000 people who caucused in the 2008 contest when Mrs Clinton was beaten into third by Barack Obama and John Edwards.
Iowa does not always pick the eventual winner. The last Republican winner in Iowa who won the party's nomination was George W Bush 16 years ago.
In the weeks ahead, there will be more ballots in the 49 other states plus US territories.
US elections 2016, Voting begins in US presidential race,
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