Chavez has said the vote - held one year after he suffered his first electoral defeat - could decide "the future of the revolution, the future of socialism and also the future of Hugo Chavez."
Early turnout was high as Venezuelans formed long lines to cast ballots for governors, mayors and other local officials.
After a decade in office, Chavez still enjoys widespread popularity and has maintained control of most local posts. But last year's defeat of his attempt to abolish term limits has energized the opposition, which has sought to capitalize on complaints about rampant crime, corruption and inflation.
The vote could either hand Chavez another setback or help him lay the groundwork to extend his rule beyond 2013, when his six-year term ends.
Chavez said after casting his ballot that Venezuela's democracy is "demonstrating its strength once again" and that its automated voting system is one of the most "transparent, quickest, most secure in the world."
He urged all to respect the outcome and said, "We're prepared to recognize any result."
Pre-election polls showed Chavez's candidates leading in a majority of races, while the opposition was ahead or in tight races in several of Venezuela's most populous states.
Aquiles Vera, a 47-year-old construction worker who voted in a Caracas slum, said he supported Chavez's candidates and believed the president's ability to stay in office was at stake.
Vera said he fears a loss for pro-Chavez candidates could mean "all the president's plans would collapse - like the missions (social programs), cheap food, medicines."
But in the second-largest city of Maracaibo, Isabel Cepeda said she was fed up with corruption and trash-strewn streets, and planned to vote for opposition challenger Manuel Rosales for mayor. Cepeda, 52, said it was also a vote against Chavez.
"We want democracy to continue in our country, and it's now held hostage," Cepeda said. "If we stay on this path, we're headed toward being a second Cuba."
Chavez supporters already control congress and critics say the Supreme Court is in his pocket. The president has campaigned hard to keep his allies in state houses and city halls, calling some opponents "traitors" and "oligarchs."
Voters in parts of Caracas were awakened before dawn with a noisy get-out-the-vote tool: fireworks and recordings of reveille blaring from loudspeakers.
"Turnout has been massive," electoral council chief Tibisay Lucena said.
Defense Minister Gustavo Rangel Briceno said the balloting was proceeding "in complete peace." Some 140,000 troops were assigned to security for the vote, which follows a bitter campaign in which Chavez threatened to cut off national funds to states that end up in opponents' hands.
Chavez's allies swept the last state elections in 2004 with all but two of 23 governorships and a majority of local offices. This year, 22 governorships, 330 mayoral posts and other offices are at stake.
A list of 272 would-be candidates, including some prominent Chavez opponents, were disqualified earlier this year by the country's top anti-corruption official, who said they faced corruption accusations. The Supreme Court upheld the move despite opposition protests.
Chavez, now in his third term, has seen his popularity rebound since last year's referendum defeat.
The candidates included Chavez's brother, Adan, who was trying to succeed their father as governor in their homes state of Barinas, and the president's ex-wife, Marisabel Rodriguez, running as an opposition mayoral candidate in one district of Barquisimeto.
Associated Press writer Fabiola Sanchez in Caracas contributed to this report.