The Front for Victory was defeated in Buenos Aires province, where the Renewal Front list headed by Sergio Massa won by 11.8 percentage points.
Despite its loss in Buenos Aires, Ms Fernandez's party retained its majority in both houses of Congress.
The poll is seen as a good indicator of who might replace the president when she leaves office in two years' time.
By Ignacio de los ReyesBBC Mundo, Buenos Aires
Rising political star Sergio Massa from the Renewal Front is widely seen as a potential presidential candidate in 2015 after a landslide victory in Buenos Aires province.
The mayor of Tigre is expected to lead the Peronist opposition to President Fernandez.
He is a former ally of the president who once served as her cabinet chief.
In recent months, he campaigned against Ms Fernandez, demanding radical changes to combat growing inflation and insecurity, while keeping some of her most popular policies, like high public spending on social services.
Mr Massa's critics say he represents the return of neo-liberalism after a decade of left-leaning policies and refer to him as the "candidate of Clarin", a powerful media group in constant battle with the government.
Other potential candidates for 2015 include centrist Buenos Aires governor Daniel Scioli and conservative Buenos Aires mayor Mauricio Macri.
Ms Fernandez is barred by the constitution from running for a third term in office.
A constitutional amendment would have required a two-thirds majority in Congress, for which her party now has insufficient seats.
Nationwide, support for the governing Front for Victory has dropped from 54% two years ago, when Ms Fernandez was elected to a second term in office, to around 33% on Sunday.
Mr Massa said his victory in Buenos Aires - where 37% of the country's voters live - sent "a clear message" that Argentines wanted change.
A former ally and cabinet chief of Ms Fernandez who left the Front for Victory to form his own party in June, Mr Massa is now seen as a key candidate for the 2015 presidential election.
"In just 120 days, a path to the future has been born for our province - and, why not say it, for the country too," he said.
The Opposition politician and Mayor of Buenos Aires, Mauricio Macri, also hinted that he intended to run for the presidency, saying: "Tomorrow, we start with a new political map."
For the governing party, Buenos Aires Province Governor Daniel Scioli is expected to throw his hat in the ring.
President Fernandez's government has been facing increasing discontent about rising crime, high inflation and corruption.
Vice-President Amado Boudou, who is standing in for Ms Fernandez while she recovers from brain surgery, is himself under investigation for alleged corruption.
He stressed that despite its defeat in Buenos Aires and other populous provinces such as Santa Fe, Cordoba and Mendoza, the Front for Victory remained the most popular party nationwide.
Interior Minister Florencio Randazzo said more than 75% of the electorate had taken part in the polls, during which 16- and 17-year-olds were for the first time allowed to vote.
Voters chose 127 members of the 257-strong Chamber of Deputies and a third of the Senate's 72 members.
Ms Fernandez has been president since 2007. She was preceded in the post by her husband Nestor Kirchner, who died three years ago.
The party of Argentine President Cristina Fernandez de Kirchner has suffered a setback in mid-term polls.