With this win, the PR alliance increased its representation in Parliament to 82 seats, and while it does not significantly affect the balance of power, it provides the fledgling partnership of Pas, DAP and PKR a huge psychological advantage as it continues to try to destabilise and topple the BN government.
It is also the clearest sign yet that the PR alliance has not lost the support it obtained in the last general election, when it denied BN its traditional two-thirds majority in Parliament.
BN's defeat in Kuala Terengganu is also a significant setback for Datuk Seri Najib Razak, who led the ruling coalition's campaign and who is set to take power as prime minister in March when Datuk Seri Abdullah Ahmad Badawi retires.
With this defeat, BN still has 137 seats in Parliament, with one independent and two from SAPP. PR parties make up the remaining 82 lawmakers.
Wakaf Mempelam assemblyman Abdul Wahid defeated Wan Ahmad by 32,883 to 30,252 votes. Independent Azharudin Adam lost his deposit after obtaining only 193 votes. In last year's general election, BN won the seat by a wafer-thin 628 votes.
The turnaround for Pas shows the party not only managed to win over the crucial Chinese votes, which went BN's way last year, but also managed to claw back significant numbers of Malay votes which it had conceded to the ruling coalition previously.
The loss will cause BN to do some soul searching as it is the second by-election it has lost since March 8.
A victory in Kuala Terengganu would have represented a recovery from March 8, and provided a fillip for Najib as he prepares to take power.
But instead, Pas's win is likely to solidify PR's alliance and provide what Opposition leader Datuk Seri Anwar Ibrahim says will be renewed momentum to topple BN.
