Clinton's decision to leave the race ends a long, often bitter battle for the right to challenge Sen. John McCain, R-Ariz., in the general election.
Obama, D-Ill., who claimed victory after clinching the necessary delegates on Tuesday, will be the nation's first African American running with the nomination of one of the country's two major political parties.
Clinton's bid for history falls short
Hillary Clinton, the former first lady and two-term senator from New York, entered the race over a year ago with the words, "I'm in it to win it."
Clinton quickly emerged as the formidable frontrunner, raising millions of dollars and leading in both state and national polls.
In an ABC News/Washington Post poll conducted in December 2006, she was supported by 39 percent of Democrats and Democratic-leaning independents, well ahead of her nearest competitors -- Barack Obama with 17 percent support; former Sen. John Edwards, D-N.C., with 12 percent; and former Vice President Al Gore, 10 percent.
Obama had announced his intention to form a presidential exploratory committee a few days before Clinton's announcement on her Web site, hillaryclinton.com.
Just weeks later, standing outside Illinois' historic Old State Capitol building where Abraham Lincoln gave a famous speech condemning slavery and calling for the United States to unite, Obama, then a 45-year-old with just two years of federal legislative experience under his belt, officially announced his longshot bid.
"I recognize there is a certain presumptuousness in this, a certain audacity," Obama said to the crowd of 16,000 braving a freezing February afternoon. "I know that I haven't spent a lot of time learning the ways of Washington. But I've been there long enough to know that the ways of Washington must change."
Clinton dominated a crowded field of Democratic candidates including Obama, Edwards, as well as Sens. Joe Biden of Delaware and Chris Dodd of Connecticut, Ohio Rep. Dennis Kucinich, Gov. Bill Richardson of New Mexico, former Iowa Gov. Tom Vilsack and fomer Sen. Mike Gravel of Alaska, for much of the summer and early fall of 2007.
In an interview with ABC News' "Nightline" in September 2007, Clinton chief strategist Mark Penn confidently predicted, "I believe she's going to be the nominee. I think every day is a good one, and I think that as every day goes on people see that she has the strength and experience to become president."
There was reason for optimism: Clinton had survived nearly the entire year as the Democratic frontrunner and none of her opponents seemed to be gaining major traction. But that trend was about to change.
The turning point
At a Halloween debate on Oct. 31, 2007, chinks in Clinton's armor appeared.
Sharply challenged by Obama and Edwards on Iraq, free trade and illegal immigration, Clinton said a New York State proposal supported by then-Gov. Eliot Spitzer to give driver's licenses to illegal immigrants "makes a lot of sense."
Critics and the other candidates pounced and Clinton later admitted she "wasn't at (her) best" during the debate.
Ten days later, Obama outshined Clinton at Iowa's Jefferson-Jackson dinner in Des Moines and both candidates seemed to increase the rhetoric of the race.
"If we are really serious about winning this election, Democrats, then we can't live in fear of losing," Obama said, accusing Clinton of running a "poll-driven campaign," in a speech the Obama camp would later use in several effective television ads against Clinton.
"Change is just a word if you don't have the strength and experience to make it happen. We must nominate a nominee who has been tested and elect a president who is ready to lead on Day One. I know what it's going to take to win," Clinton shot back.
National polls still put Clinton on top, but Obama was showing strength in Iowa, where the first contest in the race would be held.
A month later, Obama picked up the endorsement of Oprah Winfrey and the formidable pair hit the campaign trail in Iowa, New Hampshire and South Carolina.
"Experience in the hallways of government isn't as important to me as experience on the pathway to life. I challenge you to see through those people who try to tell you that experience in politics as usual is more valuable than wisdom outside the walls of Washington, D.C.," Oprah told crowds of enthusiastic supporters, though she did not mention Clinton by name.
The tide appeared to be turning back to Clinton when she picked up the endorsement of The Des Moines Register.
"I've got my groove back," Clinton declared in December 2007, when asked by ABC News' Kate Snow about the state of her campaign during a chaotic -- and memorable -- stop for the Clintons at a Hyvee grocery in Iowa.
The Clinton campaign embarked on the "Every Vote Counts" tour of Iowa, dubbed the "Likeability Tour" by the press corps who had accompanied her for nearly a year already.
In an interview with ABC News' Cynthia McFadden for "Nightline" that same month, the candidate expressed cautious optimism that her campaign had turned the corner.
"I think the campaign is doing very well," Clinton told ABC News. "There's a rhythm to campaigns. I know that. I've been in a lot of them over the course of my life. It's really picking up steam, and that's what I feel."
Sen. Clinton traveled Iowa by bus and helicopter, joined by daughter, Chelsea, and her mother, Dorothy Rodham, at various points, making an explicit appeal to women -- her core group of consistent support throughout the campaign.
"We're going to break the highest glass ceiling, for not just me, but for all girls and women," Clinton told "Nightline." "You know that wonderful old line about women do everything? It's like Ginger Rogers did everything Fred Astaire did, only backwards and in high heels. Well, we just have to go out and do it. There's no point in worrying about it."
Obama takes Iowa, Clinton takes New Hampshire
On Jan. 3, 2008, Barack Obama won the Iowa caucuses. Clinton had been bested not only by Obama but also -- although narrowly -- by Edwards as well.
"They said this day would never come," Obama said in his victory speech, calling the win a "defining moment in history."
With only five days between Iowa and New Hampshire, Clinton didn't have much time to slow Obama's momentum.
At the ABC News/WMUR/Facebook debate on Jan. 5, 2008, Clinton and Edwards came out strong against Obama.
"Making change is not about what you believe or about making a speech, it's about working hard," Clinton said, then raising her voice to continue: "I want to make change, but I've already made change. I'm not running on a promise of change. But on 35 years of change. ... We don't need to raise false hopes of people in our country about what can be delivered."
The back-and-forth got so heated that fourth-place candidate Bill Richardson quipped, "I've been in hostile negotiations that are a lot more civil than this."
Two days later -- a day before the nation's first primary in New Hampshire -- Clinton found herself in the Cafe Espresso in Portsmouth with 16 undecided voters, mostly women, warmly and calmly taking questions.
"My question is very personal, how do you do it?" asked Marianne Pernold Young, a freelance photographer from the state. She mentioned Clinton's hair and appearance always looking perfect. "How do you, how do you keep upbeat and so wonderful?"
Clinton began responding, jokingly but then began getting emotional: "It's not easy, and I couldn't do it if I didn't passionately believe it was the right thing to do. You know, I have so many opportunities from this country, I just don't want to see us fall backwards."
Her voice breaking and tears in her eyes, she said: "You know, this is very personal for me. It's not just political, it's not just public. I see what's happening, and we have to reverse it."
Female voters seemed to respond to that emotion. They came out in droves for her in New Hampshire, surprising even Clinton's own staff.
On Jan. 8, 2008, Clinton won New Hampshire saying she had "found her voice" in the victory. Staffers who had been ready to resign that night suddenly found themselves toasting to victory.
The Democratic battle then turned to South Carolina, where Obama held an advantage but Clinton came in having stolen back the campaign's momentum.
The role of race
Following her comeback in New Hampshire, Clinton won the uncontested vote in Michigan (Obama was not on the ballot as the Democratic National Committee had stripped the state of its delegates for skipping ahead of other states on the election calendar) and the Nevada caucuses, though in that state Obama emerged with one more delegate at the time.
The next critical contest would be in South Carolina, prominently raising the subject of race in a contest pitting Obama, potentially the first African American nominee, Clinton, the first woman, and Edwards, a son of the south who was born in South Carolina itself, against one another.
Former President Bill Clinton proved more a liability than asset to his wife's campaign when in New Hampshire he declared, "Give me a break. This whole thing is the biggest fairy tale I've ever seen," in regard to Obama's portrayal of his record on Iraq.
The former president was making the case that Obama -- just like Sen. Hillary Clinton -- had voted to fund the war since he's been in office and that the two had essentially the same record on the controversial war.
Obama said the former president has taken his campaigning on his wife's behalf too far.
"I understand him wanting to promote his wife's candidacy," Obama told ABC's "Good Morning America" in January. "She's got a record that she can run on. But I think it's important that we try to maintain some -- you know, level of honesty and candor during the course of the campaign. If we don't, then we feed the cynicism that has led so many Americans to be turned off to politics."
Obama blew out Clinton 55 percent to 27 percent in South Carolina. Edwards came in a distant third at 18 percent, prompting him to leave the race before the critical Super Tuesday contests on Feb. 5.
In the wake of Obama's win, Bill Clinton made matters worse for his wife, seemingly dismissing the Obama campaign's chances for victories by comparing him to a previous unsuccessful minority candidate. Clinton told ABC News' David Wright in Columbia, S.C.: "Jesse Jackson won South Carolina in '84 and '88. Jackson ran a good campaign. And Obama ran a good campaign here."
Super Tuesday split decision
John Edwards' departure from the race left a two-person contest for the Democratic nomination leading up to Super Tuesday, when 22 states held contests with nearly 1,700 of the more than 4,000 delegates at stake. After all the build-up, though, when all the votes were counted there still was no clear winner.
Clinton and Obama traded Super Tuesday victories as energized Democratic voters turned out in record high numbers.
Obama won the most states, picking up victories in Illinois, Idaho, Colorado, Minnesota, Connecticut, Utah, North Dakota, Kansas, Delaware, Missouri, Georgia, Alabama and Alaska.
But Clinton won the delegate-rich states of California, New York, Massachusetts (despite Obama receiving the endorsement of Sen. Ted Kennedy and Caroline Kennedy), and New Jersey, in addition to wins in Arizona, Oklahoma, Tennessee, New Mexico, Arkansas, and American Somoa.
Meanwhile, on the Republican side, Arizona Sen. John McCain, secured his status as the unstoppable GOP frontrunner, although his last opponent, former Arkansas Gov. Mike Huckabee would not leave the race for another month.
Clinton woes mount, Obama goes on 11-0 run
In the wake of Super Tuesday, Clinton faced her toughest stretch of the campaign since the period before the initial loss in Iowa.
Patti Solis Doyle, Clinton's campaign manager who had been with her since she was first lady of Arkansas, resigned from the campaign.
In a note sent to the campaign staff, Solis Doyle said: "This has already been the longest presidential campaign in the history of our nation, and one that has required enormous sacrifices from all of us and our families."
She wrote that she has been "proud to manage this campaign, and prouder still to call Hillary my friend for more than sixteen years. I know that she will make a great president."
Maggie Williams, Clinton's chief of staff when she was first lady and an African American, took over as Clinton's campaign manager.
The Clinton campaign also announced that the candidate had loaned $5 million of her own fortune to her campaign, raising considerable questions about her ability to compete financially against an opponent who continued to raise record amounts through the spring.
Obama won 11 straight primaries or caucuses in Louisiana, Nebraska, Washington State, the U.S. Virgin Islands, Maine, Maryland, Virginia, Washington, D.C., Hawaii, Wisconsin, and Rhode Island.
The streak included some of Obama's most impressive victories including a 64-35 percent win in Virginia, 75-24 percent in his native Hawaii, and a 58-41 percent margin in Wisconsin.
In Wisconsin exit polls, Democrats identified Obama, not Clinton, as most likely to win in November and it was one of the few times Clinton struggled to hold on to the support of some of her core groups -- white women, less-educated and lower-income voters.
As the losses kept coming, calls for Clinton to withdraw from the race began to grow louder, but the former first lady vowed to fight on in Texas and Ohio, which both held contests on March 4.
"If she wins Texas and Ohio I think she will be the nominee. If you don't deliver for her, I don't think she can be. It's all on you," former President Bill Clinton declared in the lead-up to the vote in those states.
And, once again, with her campaign on the line, Clinton pulled out a significant victory, winning both the Texas and Ohio primaries and vowing to fight on to the next biggest contest in Pennsylvania.
Obama faces controversy
Obama picked up expected wins in Wyoming and Mississippi, sending the race into its longest lull since voting began -- six weeks between the contest on March 11 in Mississippi and the next vote in Pennsylvania on April 22.
In that time, Obama faced undoubtedly the toughest test of his campaign.
Controversy erupted around the Rev. Jeremiah Wright, Obama's pastor at Trinity United Church of Christ for more than 20 years, when ABC News' "Good Morning America" aired sermons in which Wright repeatedly denounced the United States based on what he described as his reading of the Gospels and the treatment of black Americans.
"The government gives them the drugs, builds bigger prisons, passes a three-strike law and then wants us to sing 'God Bless America.' No, no, no, God damn America, that's in the Bible for killing innocent people," he said in a 2003 sermon. "God damn America for treating our citizens as less than human. God damn America for as long as she acts like she is God and she is supreme."
Wright also told his congregation on the Sunday after Sept. 11, 2001, that the United States had brought on al Qaeda's attacks because of its own terrorism and claimed the U.S. government might have created the AIDS virus to harm blacks.
Obama initially defended Wright in a widely lauded speech on race.
"He strengthened my faith, officiated my wedding and baptized my children," Obama said in that speech. "I can no more disown him than I can disown the black community. I can no more disown him than I can my white grandmother -- a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who, on more than one occasion, has uttered racial or ethnic stereotypes that made me cringe."
But several weeks later, when Wright reappeared and affirmed many of the controversial statements he had previously made, Obama cut ties with the Reverend and denounced him.
"The person I saw yesterday was not the person I met 20 years ago," the Illinois senator said at a press conference in Winston-Salem, N.C. "His comments were not only divisive and destructive, but they end up giving comfort to those that prey on hate."
For her part, Clinton largely resisted commenting on the controversy, although she did call Wright's remarks "offensive and outrageous."
But, privately, many Clinton aides admitted they were hearing from superdelegates concerned about Wright's controversial remarks.
Bosnia exaggerations & 'bitter' remarks
During that same time, Clinton also faced controversy surrounding an exaggerated description she gave of a 1996 trip to Bosnia.
Clinton said she and her crew landed in an "evasive maneuver under sniper fire," describing her trip to Tuzla as if it were a scene from "Saving Private Ryan."
"There was supposed to be some sort of greeting ceremony, but instead we just ran with our heads down to get into the vehicles," she said.
Questions surrounding whether Clinton had embellished the story were particularly embarrassing for her because a central theme to her campaign had been her "experience," arguing that she is ready to answer the 3 a.m. crisis call at the White House.
Video footage contradicted Clinton's account, revealing no visible threat in Tuzla and a brief greeting ceremony on the tarmac there.
Clinton later said she "misspoke" when describing the account.
And on the heels of the Wright controversy, Obama came under fire for remarks perceived as insulting to small town voters, like many in rural Pennsylvania.
"It's not surprising, then, they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations," Obama told a crowd at a San Francisco fundraiser.
The comments, first posted on The Huffington Post, opened a line of attack against Obama that he was too elitist or out of touch to connect with the white, working class voters who had been flocking to Clinton in recent contests and would be key in battleground Pennsylvania.
Both incidents -- and reaction to the Wright controversy -- played a prominent role when the candidates met for the final time on a debate stage in Philadelphia.
Clinton wins Pennsylvania, splits Indiana & North Carolina
After a six-week stretch between contests, Clinton decisively won the Keystone State by nearly a 10-point margin.
"Some people counted me out and said to drop out, but the American people don't quit, and they deserve a president who doesn't quit, either," Clinton told supporters at a victory rally in Philadelphia.
The day after her win, Clinton told Diane Sawyer on "Good Morning America" that the win should send a message to unpledged superdelegates.
"The road to the White House does go through Pennsylvania," she said, adding that the Pennsylvania win proved that she can win the large and swing states considered crucial to a November victory.
The candidates split wins in Indiana and North Carolina on May 6, but in claiming victory Clinton seemed to acknowledge defeat.
Flanked by her husband and daughter, Clinton thanked Indiana voters for their support, but she was not the relentlessly upbeat Clinton of victories past. And in contrast to other primary night parties, Bill Clinton stood unsmiling behind her for much of the speech.
Clinton pledged to "never stop fighting for you," but faced with a decisive Obama victory in North Carolina and uncertain results in Indiana, she also seemed to concede the possibility that she might not become the eventual nominee.
"People are watching this race and they're wondering ... I win, he wins, I win, he wins ... it's so close. That says a lot about how passionate our supporters are ... but I can assure you that no matter what happens I will work for the nominee of the Democratic party," she said.
Clinton continued to wage a strong campaign in the close weeks, though attacks on her opponent all but disappeared from her speeches and events.
Instead, Clinton focused on pushing the Democratic National Committee to recognize the disputed votes in Florida and Michigan and racked up impressive, double digit wins in West Virginia, Kentucky, and Puerto Rico.
But even big wins could not sustain Clinton.
After her 41-point win in West Virginia, Obama pushed the bad news off the front pages by picking up the endorsement of former rival John Edwards.
Clinton did succeed in getting some delegates recognized from Michigan and Florida but not all that she wanted.
The Democratic National Committee's rules and bylaws committee voted to seat the full Michigan and Florida delegations, but with each delegate getting only half a vote. In the arrangement, Clinton picked up 94.5 total delegates to Obama's 65.5, for a net gain of 19 delegates overall.
Clinton supporters angry, some disrupting the committee proceedings, chanting, "Denver! Denver! Denver!" as a sign they want Clinton to take her fight all the way to the Democratic Convention.
"Mrs. Clinton has instructed me to reserve her right to take this to the Credentials Committee," Harold Ickes, a key Clinton strategist told the Democratic National Committee.
In a parting shot, Clinton pulled one last upset in South Dakota while Obama took Montana in the final primary contests of Democratic nomination.
Delegate count bogs down Clinton
In the end, Clinton faced one insurmountable reality: math.
Obama emerged from one of the longest Democratic contests in recent history ahead in pledged delegates, though still officially short of the number necessary to clinch the nomination.
The only option left available to Clinton was to push her fight to the Democratic convention in late August.
Such a protracted fight would have undoubtedly left the Democratic nominee damaged, forced to face a Republican nominee free to campaign through the summer against a disorganized and divided Democratic party.
Instead Clinton will end her bid, allowing Democrats to join ranks around Obama and head into the next stage of the election against McCain.
Obama will officially accept the Democratic nomination on Aug. 28, 2008, in Denver, coincidentally on the 45th anniversary of the Rev. Martin Luther King, Jr.'s "I Have a Dream" speech -- another memorable moment in a campaign already making history.
ABC News' Rick Klein, Jennifer Parker, and Jake Tapper contributed to this report.