Italians are voting after a divisive campaign dominated by concerns over immigration and the economy.
Correspondents say it is hard to say who will come out on top in an unpredictable contest.
The anti-establishment Five Star Movement, ruling Democratic Party and ex-PM Silvio Berlusconi’s right-wing coalition have all predicted victory.
But Mr Berlusconi, 81, cannot himself hold public office until next year due to a tax fraud conviction.
The four-time prime minister – who has allied himself with the anti-immigrant League party – has backed European Parliament President Antonio Tajani as his choice to lead the country.
Opinion polls were banned in the last two weeks of the campaign but surveys before that suggested Mr Berlusconi’s alliance was in front but would not win a majority.
Five Star is widely expected by pollsters to emerge as the single biggest party.
What are the key issues?
More than 600,000 migrants have made the treacherous journey from Libya across the Mediterranean to reach Italy since 2013.
The huge number of arrivals has upset many Italians – with politicians, including from the mainstream, toughening their rhetoric as a result.
Mr Berlusconi has called the presence of illegal migrants a “social time-bomb” and pledges mass deportations.
The campaign has seen violent clashes between far-right supporters and anti-fascist protesters
Italy’s economy has started to expand once again but nearly 10 years on from the Global Financial Crisis, Italy’s gross domestic product – or total economic output – remains 5.7% lower than pre-crisis levels.
In 2016, some 18 million people were at risk of poverty, and unemployment is at 11%.
Economic policy has been a key battleground but observers say they have heard more from parties about pensioners than youths, which could be due to young voters’ high vote abstention rates.
Why is this election important?
Italy is the EU’s fourth-largest economy and the potential gains by populist and far-right parties is a major concern in some European capitals and in Brussels.
Contenders have lined up to blame EU budget rules for hampering economic recovery. Five Star and the League had promised to hold a referendum to leave the euro but dropped that rhetoric.
- The anti-establishment Five Star party was founded in 2009 by comedian Beppe Grillo, who denounced cronyism in Italian politics. Current leader Luigi Di Maio has pledged a universal basic income scheme
- Silvio Berlusconi has brought his centre-right Forza Italia into alliance with the anti-immigrant League and far-right Brothers of Italy. Although Mr Berlusconi has backed Mr Tajani, League leader Matteo Salvini also has prime ministerial ambitions
- Matteo Renzi’s Democratic Party has partnered with three smaller parties to form a centre-left, pro-EU bloc that has staked its campaign on proposals to revive the economy. Mr Renzi resigned as PM in December 2016
When will we know the result?
Voting is being held from 07:00 to 23:00 (0600-2200 GMT) on Sunday, with exit polls to follow when polling stations close.
Official results are expect in the early hours of Monday.