Burns, battling personal scandal with his links to convicted lobbyist Jack Abramoff as well as voter discontent with the Iraq war, congratulated Tester, a farmer and state legislator.
"I stand ready to help as Montana transitions to a new United States Senator," Burns said in the statement. "We fought the good fight and we came up just a bit short. We've had a good 18 years and I am proud of my record."
Burns wrote that he was looking forward to some time off, and plans to go deer hunting, hoping to bag a "big buck."
Burns' concession coincides with the GOP's expected acknowledgment in Virginia that the Democrat there had won, giving Democrats now a 51-49 advantage of the Senate.
After what started as a 10% to 12% lead for Tester, it came down to a very close race, and Burns actually won most of the 56 Montana counties, including edging Tester in populous Yellowstone County, site of Billings, the state's largest city. Burns triumphed in the smaller, rural counties, as he has always done, and any new Tester votes in those places were ultimately irrelevant, according to the final tally.
Where Tester made a difference was in the traditional Democratic and labor cities of Missoula, Butte, Anaconda, Great Falls and the capital city of Helena. Tellingly, Tester also won the counties containing the state's seven Indian reservations, where Burns has never been popular.
The key probably was the angry, anti-Burns-motivated voter turnouts in those key Dem counties, following an especially nasty and costly (for Montana) broadcast and print campaign. Beginning in 2005, the Democratic Party ran TV ads linking Burns to Abramoff. Then Burns compounded matters by badmouthing wildland firefighters and remaining devoted to Bush and the Iraq war, which hurt his image among women and independents in the Democratic counties. Enough of Montana's independent voters showed their displeasure with Burns to squeak Tester to a win.
All in all, Tester won only 14 of the 56 counties, and some of those, just barely. But it was apparently enough. So Montana, which overwhelmingly re-elected its lone G.O.P. Congressman, essentially remains a red state. Brian Schweitzer's election in 2004 to governor can be considered a fluke, as he was running against a scandal-ridden, incompetent G.O.P. incumbent. Neither his victory, nor Tester's, can be considered a trend toward blue in the West, as some Eastern pundits have interpreted it. Voters in those traditional G.O.P. counties demonstrated that no amount of scandal could sour them on Burns.