"This momentum is going to continue. This movement is going to continue, and we're going to continue scoring, just as we did tonight," Paul told cheering supporters at a hotel in a northern suburb of Des Moines. "We will go on. We will raise the money. And I have no doubt about the volunteers. They will be here."
The libertarian-leaning Paul challenged Mitt Romney and Rick Santorum for the top slot in the leadoff nominating contest, cobbling together an enthusiastic and diverse coalition of college students, veterans and tea party activists in a sign of the divided GOP's struggles ahead.
"There were essentially three winners," Paul told the crowd as it chanted "Doctor Paul, Doctor Paul."
Paul's top-tier performance was a marked improvement on his fifth-place finish four years ago. But Paul waged a far more structured campaign in his second bid for the nomination, raised more money and advertised aggressively on television, attacking former House Speaker Newt Gingrich throughout November.
Paul rose steadily in Iowa polls late last fall as Texas Gov. Rick Perry, Minnesota Rep. Michele Bachmann and Herman Cain, the Georgia businessman who quit the race in December, all struggled to sustain early curiosity as potential outsider challengers to establishment candidate Romney.
Paul's calls for strict spending cuts and the abolition of the Federal Reserve are popular rallying cries for conservatives, while his opposition to foreign military intervention and desire to close overseas military bases appeal to younger voters.
However, his opposition to a military strike against a nuclear-armed Iran prompted sharp attacks from Santorum, who was locked in a tight race with Romney, and Bachmann, who fought Paul for tea party supporters.
Undeterred, Paul recommitted to the positions that have prompted questions about whether he will run as a third-party candidate if he is not nominated, a move he has said he does not want to make.
The 76-year-old physician-turned-congressman has become an iconic figure for angry conservatives and strict constitutional constructionists fed up with government overreach.
And despite his rise among Iowa Republicans, he was viewed in the same polls as among the least likely to be elected, demonstrating the divide in the GOP between an ideological favorite or one viewed as a more viable challenger to Democratic President Barack Obama.
It was clear from the Paul campaign rally in Ankeny, after the results were in, which option they preferred.
The crowd, far from the typical Republican establishment activists, cheered wildly for the low-key, humble Paul as he took the stage in the hotel ballroom.
"There's nobody else that has people like you working hard and believing in something," Paul said. "That is all the difference in the world."
While several candidates had begun attacking Paul, one who didn't was Romney, who emerged from Iowa a top-tier candidate despite not campaigning as aggressively as he did four years ago.
Romney aides had said a strong finish by Paul was not a concern because they did not feel the Texan had the financial and organizational strength to wage a months-long battle for the nomination.
Paul echoed the point Monday on his last full day of campaigning, noting in an Associated Press interview that he needed big turnout in Iowa's caucuses and the next-up New Hampshire primary, and that the path beyond the early states was "a challenge."
Paul also said Monday that he didn't necessarily envision himself as president, and said his odds of winning were slim.
Still, Paul's campaign dug in even during the closing hours of the campaign, launching an automated telephone message campaign questioning Santorum's commitment to opposing abortion rights.