Acting Prime Minister Mariano Rajoy's centre right People's Party (PP) again emerged with the single biggest bloc of seats but fell short of a majority.
It leaves the Eurozone's fourth-largest economy at risk of another lengthy political stalemate or even of a third general election.
The PP was the only major party to increase its share of seats from December's inconclusive poll.
The PP won 137 seats, up from 123 in December but short of the 176 needed for an outright majority.
Spain now enters another round of backroom talks to see which parties can form a governing coalition, a task that eluded them despite months of negotiations following the December vote.
Options to form a government include a centre-right pact between the PP and liberal newcomer Ciudadanos, a German-style grand coalition between the PP and the Socialists, or even a minority PP administration.
The result, however, adds to political uncertainty in Europe after last week's shock Brexit vote and piles intense pressure on Spain's warring politicians to form a government.
Spanish politicians will be under pressure to reach a deal quickly given the current uncertainty. Brexit hit financial markets in indebted Spain particularly hard.
Reaction to the result was swift, with Parliament's GUE/NGL group leader Gabi Zimmer congratulating the Spanish leftist parties' success .
The MEP said, "Podemos and the United Left (IU) fought for social justice and an end to austerity, and they will continue to be the third largest political force in the country.
"We must also congratulate regional leftist parties such as EH Bildu for their excellent showing. Continuous support for leftist parties is a clear reflection of widespread public anger over austerity across Europe.
"In addition, Sunday's vote further emphasises a clear rejection by voters of the rusty, decades-old two-party system in Spain.
"However, as we are still no closer to finding a solution to the political deadlock in place since last December's inconclusive election, that also means further delays in the pathway towards ending Madrid's failed austerity policies.
"The socialist opposition party, PSOE, must now decide whether to help PP to stay in power, or to unshackle a nation mired in corruption, huge unemployment and painful austerity.
"All over the EU, the Left must put strong pressure upon national governments to bring an end to austerity.
"The EU will only have a future if there is a radical change towards a more social and democratic union for the benefit of its citizens - not for the banks and multinationals."
Meanwhile, the Spanish government has called for joint sovereignty over Gibraltar in the wake of the UK's vote to leave the EU.
The British overseas territory of 30,000 voted overwhelmingly for remain, with 95.9 per cent opting to stay in the EU.
"The Spanish flag on the Rock is much closer than before," Spain's acting foreign minister Jose Manuel Garcia-Margallo said.
Further comment came from Parliament's S&D group leader Gianni Pittella who said, "The Spanish people have voted and made it clear that the PSOE is the reference point for the left.
"Congratulations to PSOE party leader Pedro Sánchez who has led a strong election campaign with a clear message of more solidarity and fairness for the people. This related specifically to PSOE's determined fight against high youth unemployment.
"Together with PSOE and other progressive forces in Europe, we will continue this fight jointly - at EU-level as well - with renewed vigour in the coming months.
"In turbulent economic and political times, in which we see our fundamental values being threatened by populist forces all around Europe, we must be clear on our side.
"Credibility and truth instead of lies and over-simplifications. In Spain we have also seen that populists just strengthen the right rather than helping the people."