The win in the western German state of Saarland came despite the latest national surveys showing support for the SPD dipping, as Scholz faces criticism for his stance on Ukraine and pandemic management.
Just over 100 days after taking power, Chancellor Olaf Scholz and his Social Democrats have cleared their first electoral test, with a thumping win in regional polls in the small state of Saarland.
Exit polls on Sunday showed that the centre-left party was on course to grab 43-44 percent of the vote, snatching top spot from former chancellor Angela Merkel's CDU party.
CDU is set for a record low of 27 percent, separate estimates published by broadcasters ARD and ZDF showed.
The upset leaves the conservatives, which had controlled the state since 1999, deep in the doldrums while lending momentum to the SPD ahead of similar regional polls this year.
The Social Democrats' regional candidate, Anke Rehlinger, 45, a lawyer who holds the state shotput record is now in pole position to take over as state premier.
Rehlinger, currently in charge of Saarland's economy, had won over locals with her action for victims of de-industrialisation.
Her rival, the incumbent state premier Tobias Hans, 44, had struggled to hang on to support, accused of a wavering stance during the pandemic.
Largely written off just months before his own election, Scholz came from behind to replace Merkel, who was retiring, in a major upset in September that breathed new life into his party.
SPD general secretary Kevin Kuehnert called Sunday's win a "landslide" which gives the party "incredible tailwind" as it looks ahead to three other regional elections in the coming months.
The SPD's strong vote share on Sunday leaves smaller parties like the ecologist Greens or the far-right AfD with just barely the required vote share to cross the 5 percent threshold into parliament.
Latest national surveys had actually show support for the SPD dipping, as Scholz faces criticism for failing to take a more assertive stance against Russia's attacks on Ukraine or in handling the coronavirus pandemic.
In Saarland itself however, his SPD is benefiting from voters' reluctance to rock the boat against the backdrop of the conflict.