The victory by Jones, a former prosecutor, sliced the GOP's already thin Senate majority to a bare 51-49.
He will replace interim Republican Sen. Luther Strange, who was appointed in February to fill the seat vacated by Attorney General Jeff Sessions.
Moore had counted on landslide support among the state's overwhelmingly white, conservative electorate to overcome charges he molested two teenage girls and pursued a romantic relationship with several others when he was a prosecuting attorney in his 30s.
But he was drubbed by a strong turnout among black voters, who voted in crushing numbers for Jones.
Normally, Moore would have been the commanding favorite in this strongly Republican state, which voted overwhelmingly for President Donald Trump and hasn't elected a Democrat to the Senate in 25 years.
But the allegations of sexual misconduct and a history of controversial statements and defiant actions that twice had Moore booted from the state Supreme Court gave Democrats and Jones the shot at an upset.
The fact the contest was even considered close spurred many partisans eager to capitalize on what amounted to an early Christmas gift: a Democratic shot at a U.S. Senate seat in the profoundly conservative Deep South.
"I'm 45, and I've voted since I was 18," said Chris Barry, who showed up to cast a ballot for Jones at a fire station in Hoover, a heavily Republican suburb outside Birmingham. "He's the best chance we've had since I can remember."
Some, long accustomed to voting the GOP ticket, backed Moore with admitted concern.
"I think any way you look at it, it's horrendous," said Craig Gilbert, a corporate pilot. "If a man is falsely accused, it's horrendous. And if a 32-year-old man was molesting a 14-year-old girl, it's horrendous.
"You have to kind of keep your fingers crossed," Gilbert said before stepping out of the blustery cold to vote, "and hope the truth comes out and we'll deal with it at that time."
Jones, 63, is a former U.S. attorney who gained fame for prosecuting two Ku Klux Klansmen responsible for the 1963 bombing of Birmingham's 16th Street Baptist Church decades after the strike against the civil rights movement.
He was making his first try at political office.
His victory complicates Trump's efforts to pass his agenda and giving Democrats a major lift in their uphill fight to win control of the upper chamber in the 2018 midterm election.
In Washington, Moore's prospective GOP colleagues watched uneasily.
Senate Republican leader Mitch McConnell of Kentucky, who pointedly withheld his support, declined to say whether Moore would be invited to join GOP lawmakers for their near-daily lunches and strategy sessions had he won.
"All of those are good questions for tomorrow, and we await the outcome," McConnell told reporters.
Trump, who also faces accusations of sexual misconduct, largely steered clear of the contest before leaping in headlong as polls showed Moore's support among Republicans holding firm. He weighed in anew Tuesday morning on Twitter, urging Republicans to get to the polls and calling Jones a puppet of Democratic leaders in Congress. "VOTE ROY MOORE!" Trump said.
Jones, smiling broadly, cast his ballot early Tuesday morning in Mountain Brook, a well-off Birmingham suburb, expressing confidence in "where we are and how it's going to turn out."
Moore, accompanied by his wife, rode a horse to their polling place at the fire station in rural Gallant, outside his hometown of Gadsden in the northeast part of the state. It was the same thing he did in September, when he beat interim Sen. Strange in the GOP primary and thus, Moore suggested, good luck.
The special election was being held to fill the seat vacated when Jeff Sessions resigned to become Trump's attorney general.
While the two candidates were plainly happy to vote for themselves, others were less inspired.
"One has beliefs that don't line up with mine, and the other is dishonest," said Phil Smith, 52, a small-business owner in Hoover who wrote in a name he declined to say. "I'm just glad it's over."
He was far from alone.
The allegations have drawn national attention and no small amount of disparagement of Alabama, its history, its voters and their judgment. That condescension along with many millions of dollars in negative advertising, robo-calls and attack mailers left many feeling besieged, angered and fatigued.
While the Senate race has been deeply divisive, there seemed a broad consensus Tuesday on thing: gladness that the acrid campaigning was about to end.
"It's like the devil or the deep blue sea," said Republican Ann Heitz, a Hoover retiree who declined to give her age or say for whom she voted. "I put the TV on mute, I didn't answer the phone if I didn't recognize the number, and I threw out the mail.
"There is no good outcome to this for me," she said, her faced curled in a scowl. "I'm disgusted by the whole thing.
— Mark Z. Barabak, Los Angeles Times
Times staff writer Lisa Mascaro in Washington contributed to this report.