Voters have begun meeting - or caucusing - across the state in schools, churches and other venues.
With half the Republican votes counted, it appears that there is a three-way fight between Donald Trump, Ted Cruz and Marco Rubio.
Iowa kicks off a state-by-state contest over the coming weeks and months.
The Democratic race is also too close to call, with Vermont Senator Bernie Sanders mounting an unexpectedly strong challenge against the former first lady and Secretary of State, Hillary Clinton.
The third contender in that race, Martin O'Malley, is about to drop out of the contest, sources close to his campaign have told the BBC.
(BBC News)