In South Gloucestershire the party has lost its overall majority and could potentially now also lose power in the district, for the first time in many years.
The Conservatives lost 10 seats, ending the night with 23 councillors. Liberal Democrats gained three seats, and now have 20 councillors.
Labour gained six seats, and now have 17 councillors.
One independent councillor was also elected in Patchway Coniston.
Because no party has won an outright majority, the two likely options now are either the Conservatives keep power and form a minority administration, or the Liberal Democrats and Labour take power and form a coalition.
Discussions will take place over the bank holiday weekend, with final answers on who will run the council expected on Tuesday, May 9.
Councillor Ian Boulton, deputy leader of the Labour group, said his party would now have “significant influence” in the district, after many voters lost faith in the Tories due to their “disastrous policies”.
He said: “After eight years of a Conservative monopoly on power in our area, which has many residents feeling so much poorer and more vulnerable, I am delighted that the balance of power has shifted which will now allow Labour to have significant influence in South Gloucestershire.
“It is clear that voters, rightly, are holding the Conservative party to account for the disastrous policies they have imposed on us — both locally and nationally.
“We will now have a busy bank holiday weekend ahead establishing new council working arrangements. However, as many of us already have experience of working within a ‘no overall control’ authority, I know we can make it work for the good of the communities we serve.
“In the longer term, we will continue to campaign to return local Labour Members of Parliament to address the damage being caused to our country, both nationally and internationally by Conservative party policies.”
Toby Savage, the outgoing Conservative council leader, said his party did better locally than on a national level, despite losing several seats.
He added that national issues were impacting on how voters in South Gloucestershire made their decisions. Mr Savage did not stand for re-election, after deciding to spend more time with his young family.
He said: “It’s clearly a disappointing evening for the Conservatives in South Gloucestershire and it’s clearly the case that national issues are impacting these local polls. I feel desperately sad for colleagues who have lost seats because of those national factors. I thank them for the work they’ve done over many years to serve their communities.
“I’m encouraged that a number of colleagues have been returned in wards that might well have fallen to the opposition parties were they to be tracking the national position, which suggests that South Gloucestershire Conservatives are outperforming the Conservatives nationally.”
South Gloucestershire Liberal Democrats were approached for comment.
Before the election there were 75 councils across England in no overall control. According to local government experts, these councils can work well without spending too much time on party politics, but in some councils there can be “constant political jostling”.
Jonathan Carr-West, chief executive of the Local Government Information Unit, said:
“Councils in no overall control is a quirk of local authority governance that can be confusing for citizens. But it doesn’t mean that no one’s making decisions.
“In most cases one party will be able to form a cabinet, either with support from other parties or because the other parties do not agree on enough to effectively oppose them. That might sound unstable but in reality no overall control councils have a pretty good track record of getting business done effectively.”