But his victory in Sunday's vote, with more than 60 percent of voters backing his mandate according to unofficial results, was tempered by strong gains also handed to political enemies, leaving the country sharply divided.
In a triumphant speech late Sunday, Morales called on four opposition governors who are defying his program to work with him, in an uncharacteristic display of compromise.
But he also told a flag-waving crowd in La Paz: "Your vote consolidated the process of change."
"We are here to continue recovering natural resources and the consolidation of nationalization," he said.
A key political ally, Venezuelan President Hugo Chavez, called to congratulate Morales and reiterate his support for "the democratic and cultural revolution undertaken by the brotherly Bolivian people," according to a statement release by Venezuelan Foreign Minister Nicolas Maduro.
Despite his solid win -- improving on the 54 percent support that elected him Bolivia's first indigenous president in December 2005 -- Morales was facing a polarized country.
In the eastern lowlands, where the opposition governors rule, his authority was just as roundly rejected.
The divisions are ethnic, economic and historic.
The president relies on massive support among Bolivia's indigenous majority, which accounts for six out of 10 of the country's inhabitants.
They live mostly in the Andes to the west and have become increasingly assertive under Morales in their demands for a greater share of the national wealth.
But the elite, mostly of European descent, sitting on much of that wealth in the eastern lowlands in the form of farmland and gas fields, are just as determined to resist.
The governors of the states of Santa Cruz, Tarija, Pando and Beni overnight celebrated their own strong wins in the referendum.
Ruben Costas, of Santa Cruz, struck out in his speech against the president's "dictatorship" and vowed Morales would not be able to step foot in his state.
Of the other four state governors whose jobs were also on the line in the plebiscite, three were seen to have been ousted -- two of them Morales critics, and one an ally. Another Morales ally was reconfirmed to office.
One of the opposition leaders rejected in the referendum, Manfred Reyes of the central state of Cochabamba, has vowed to fight any attempt to make him stand down.
That raised the prospect of violence in his state, which has already been shaken by clashes early last year between his supporters and Morales loyalists.
Analysts said the referendum did not change the standoff between Morales and the opposition. He is expected to now organize another referendum, this one to approve a new constitution that would enshrine many of his reforms.
"The results tell us that the situation won't change... There are no conditions for an end to the crisis," one political specialist, Jimena Costa, told La Razon newspaper.
Another analyst, Franck Poupeau of the French Institute for Andean Studies, told AFP it was possible Morales would negotiate and give a little ground over his rewriting of the constitution.
But he is expected to dig in on direct taxes on the gas industry that would likely give La Paz control of income that has flowed through the hands of state governors.
"The confrontation is over the DHT (Direct Hydrocarbon Tax) because if they (the opposition governors) have no resources, autonomy will mean nothing," he said.
© 2008 Agence France Presse