Rand PaulRand PaulSanders, Dems defend ObamaCare at Michigan rally Paul: Medicaid expansion 'the big question' Rand Paul: ObamaCare replacement goal is to insure most people at lowest cost MORE won the GOP nomination in Kentucky's Senate race on Tuesday, appearing to best Secretary of State Trey Grayson by a wide margin.

With just over a third of precincts reporting, 59 percent of Kentucky Republicans picked Paul over Grayson, who checked in at 36 percent.

Paul's victory, fueled by conservatives and Tea Party activists, is a blow to the state's Republican establishment, headed up by Senate Minority Leader Mitch McConnellMitch McConnellJuan Williams: Race, Obama and Trump Schumer puts GOP on notice over ObamaCare repeal Right renews push for term limits as Trump takes power MORE.

Paul, the son of Rep. Ron Paul (R-Texas), will face off against one of two possible Democratic candidates, with state Attorney General Jack Conway (D) leading early returns.

The race is one of the most closely-watched contests in the run-up to this fall's midterm elections, with the candidates vying to replace Sen. Jim Bunning (R), who is retiring.

Bunning had backed Paul in the Republican primary, while McConnell had endorsed Grayson. McConnell had vowed to support Paul in the case that Grayson loses.

The Senate GOP leader said Republicans would "unite in standing against the overreaching policies of the Obama administration."

"We are spiraling further into unsustainable debt and Kentucky needs Rand Paul in the U.S. Senate because he will work every day to stop this crippling agenda," McConnell said.

Democrats seized on Paul's primary win, saying it weakens the Senate GOP leader's position.

"In a show of weakness for the Minority Leader, and in a race that symbolized the fight over the heart and soul of the Republican Party, Rand Paul overcame McConnell’s handpicked candidate by a large margin," Democratic National Committee Chairman Tim KaineTim KaineLaura Ingraham mulling Senate run: report Schumer puts GOP on notice over ObamaCare repeal The Hill's 12:30 Report MORE said in a statement.

Sen. Jim DeMint (R-S.C.), who heads up the Senate Conservatives Fund, and who is seen as somewhat of an increasing rival to McConnell, also hailed Paul's win.

"Rand's victory is part of an American awakening that is taking place across the country as people embrace the principles of freedom that are the backbone of our country," DeMint said. "It shows that Americans want strong leaders who will stand up to the massive spending, bailouts and debt in Washington that are bankrupting our country."

Updated at 8:15 p.m.