The result is the first indication of what Iowans think of the field of Republicans competing for the chance to challenge President Barack Obama next fall.
Saturday's outcome suggests that Bachmann has a certain level of support and, perhaps even more important, the strongest get-out-the-vote operation and widest volunteer base in a state whose caucuses require those elements.
Texas Rep. Ron Paul finished second, and former Minnesota Gov. Tim Pawlenty came in third.
Iowans cast ballots during a daylong political festival, a late-summer ritual held every four years, while candidates gave speeches throughout the day, assailing Obama for high unemployment, rising debt and stock market swings.
"We know what America needs. But unfortunately Barack Obama has no clue. He's like a manure spreader in a windstorm," Pawlenty said, adding: "Mr. President, get the government off our backs."
That elicited chants of his nickname: "T-Paw! T-Paw! T-Paw!"
Bachmann stressed her Iowa roots - she was born in Waterloo - as well as her faith, opposition to abortion rights and opposition to gay marriage. She earned cheers when she declared: "We are going to make Barack Obama a one-term president."
The Associated Press contributed to this report.