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One of Africa’s longest serving leaders, Museveni won 60.8 percent of the vote, while main opposition candidate Kizza Besigye secured 35.4 percent, according to the electoral commission.
"We have just witnessed what must be the most fraudulent electoral process in Uganda," Besigye said in a statement, calling for an independent audit of the results.
Besigye said he had been placed under house arrest.
A Reuters reporter saw his house encircled by police in riot gear and media were barred from going near it.
Museveni, 71, has presided over strong economic growth but faces mounting accusations at home and abroad of cracking down on dissent and failing to tackle rampant corruption in the nation of 37 million people.
Museveni’s ruling National Resistance Movement party said the veteran leader’s victory showed "opponents failed to offer any alternative apart from empty promises".
Earlier, European and Commonwealth observers criticised the handling of the election.
The EU observer mission said Thursday’s election was conducted in an intimidating atmosphere, while Commonwealth observers said the poll "fell short of meeting some key democratic benchmarks".
Eduard Kukan, chief observer for the EU mission, told reporters in Kampala that the poll was undermined by a "lack of transparency and independence" at the Ugandan electoral commission.
"State actors created an intimidating atmosphere for both voters and candidates," he added.
Museveni brought calm and stability to Uganda after decades of chaos at the hands of leaders Idi Amin and Milton Obote, but many opposition voters accuse the former guerrilla fighter of becoming increasingly autocratic and wanting to rule for life.
The opposition had tried to tap into mounting anger among young voters, especially in urban areas, where unemployment is high and many are frustrated by the poor state of schools and hospitals.
"We are disappointed, the election has been rigged," said 23-year-old Brenda in Kampala, who refused to give her second name due to fears for her security. "I have never seen another president and it seems it will be like that until he dies."
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Video Uganda's Museveni wins election, opposition cries foul
Ugandan President Yoweri Museveni extended his 30-year rule on Saturday, winning an election that international observers said lacked transparency and his main opponent, who was placed under house arrest, denounced as a sham.