Mohammed Khan has won the by-election to represent the Bletchley and Fenny Stratford ward.
The by-election was called after the death of Rita Venn last month and Labour candidate Mr Khan won with a majority percentage of 39.9 per cent.
The Conservative vote was 22 per cent and they finished third behind UKIP.
Andrew Pakes, Labour candidate for Milton Keynes South, said: “This is a great result for Labour in Milton Keynes and a victory for all those residents in Bletchley who are fed up of being taken for granted by the Tories. Congratulations to Mohammed Khan who will be an excellent representative for the area. The Tories have slumped from 35.5 per cent of the vote in Bletchley to just 22 per cent today.
“The clear message from this election is that life is getting harder for ordinary people and that the Government are failing to turn things around. While the Tories say the economy is healing, for many families it’s getting worse with prices rising faster than wages.
“I will be working hard with Mohammed and the Labour team to speak up for a better future for Milton Keynes.”
The Labour group leader, Councillor Peter Marland, said: “This is a great result for MK Labour as we build towards next year’s vital council elections.
“It shows we are on course to win a majority of the seats in 2014 but we take nothing for granted and will keep working hard in our communities across MK to show what differences a Labour-run council could make to people’s lives.”