The 51 percent to 49 percent vote was reported on national television early Monday with 88 percent of the votes tallied.
"This was a photo finish," Chavez told reporters, adding that he has "heard the voice of the people and will always continue to hear it," reported the Associated Press.
Opposition groups, including human rights and press freedom groups plus Roman Catholic Church and business leaders, worried the unchecked power would have threatened basic rights.
The reforms would have created new forms of communal property, let Chavez pick local leaders on a redrawn political map, lengthened presidential terms from six to seven years and let Chavez seek re-election indefinitely, according to the AP.
Now, Chavez cannot run for re-election in 2012.
When the results were announced, some opposition backers broke down in tears while others began chanting, "And now he's going away," the AP reported.
U.S. officials gave a positive assessment of the developments in the country that supplies 11 percent of U.S. crude oil imports.
White House spokeswoman Dana Perino told reporters that Chavez's defeat "bodes well ... for freedom and liberty."
"It looks like the people spoke their minds," she said, according to Reuters. "It was a close vote ... that's despite the opposition not being able to get out on TV and make its point."