The HDZ party is set to win about 60 seats, with more than 50 for the ruling alliance led by the Social Democrats. Exit polls had predicted a dead heat.
An alliance of independent candidates is likely to hold the balance of power with more than 15 seats.
The migration crisis was one of the main issues. More than 320,000 migrants have crossed into Croatia this year.
The big winner looks to be the third force in the election - an alliance of independent candidates known as Most (Bridge).
However, most said before the vote it would not join either main coalition, reports the BBC's Guy De Launey in Croatia's capital Zagreb.
So if the exit poll does indeed reflect the result, uncertain days lie ahead, our correspondent adds.
The two alliances have promised different approaches on how to handle the arrival of more refugees and migrants.
Croatia has become a transit hub for migrants, many from Syria, Afghanistan and Iraq, who want to travel north.
Croatian Interior Minister Ranko Ostojic said this week that 320,000 migrants had passed through the country so far this year.
The cost of managing the arrivals was close to 2m kuna (Â£189,000; $284,000) a day, he said.
Numbers increased when Hungary shut its border with Serbia, forcing more people to seek an alternative route north through Croatia.
Croatian Prime Minister Zoran Milanovic and his Social Democrats (SDP) have won approval for their compassionate handling of the refugee crisis.
But the leader of the opposition HDZ party, Tomislav Karamarko, has suggested using troops and fences to reduce the number of arrivals.
As well as the migrant crisis, Croatia's next government will be faced with a weak economy:
The election is Croatia's first since it joined the EU in 2013.
Croatia's opposition conservatives are leading in parliamentary elections, preliminary results suggest.