Angela Merkel's Christian Democrats (CDU) remained the largest party in Saxony, but saw their share of the vote drop by 7.4points from the last election in 2014 to 32 percent, with the far-right Alternative for Germany (AfD) coming second, an exit poll for broadcaster ARD showed. The AfD harnessed voter anger over refugees and the planned closure of coal mines in the formerly communist eastern states, casting itself as the heir of the demonstrators who brought about the fall of the Berlin Wall three decades ago.
In Brandenburg, which surrounds Berlin, the SPD clung on to first place in a state they have run since German reunification in 1990, winning 27.5 percent of the vote - ahead of the AfD on 22.5 percent.
The setbacks for the ruling parties could still hasten the break-up of the national coalition led by Mrs Merkel, who has loomed large on the European stage since 2005 and whose early departure would further unsettle a EU already unnerved by Brexit.
Ralph Brinkhaus, leader of the CDU's group in the national parliament said after the result: "Now we need to deliver in the autumn."
The next few months will be crucial if the already rocky national coalition is to survive until a federal election due in 2021, with the eastern votes, including a third in Thuringia in October, and the direction of policy both critical.
The parties are due to review the coalition, weakened by rows over migrant policy, tax and pensions.
Many SPD members want to quit an alliance that