After failing to retake power from the ruling conservative camp, Moon and his main opposition Democratic United Party (DUP) appear likely to face the crucial task of rebuilding the party to win the trust of liberals.
Ahn Cheol-soo (L), Moon Jae-in. (Yonhap)
A key figure in the reform process is likely to be former independent candidate Ahn Cheol-soo, who dropped out of the race last month after negotiations to merge candidacies with Moon fell through.
Ahn, the 50-year-old founder of South Korea's largest anti-virus software firm, AhnLab, had advocated political reform and a break away from the old-style party-centered politics that had lost the confidence of many South Korean voters.
He resisted the DUP's calls to join the party and instead ran as an independent candidate up until his withdrawal, after which he supported Moon's campaign.
His enormous popularity among the younger generations and the urban population likely contributed to a higher-than-expected voter turnout, but stopped short of handing victory to the opposition.
With the loss of Moon, a confidant and former chief of staff to the late President Roh Moo-hyun, factional infighting within the DUP is likely to escalate along the lines of Roh loyalists and non-loyalists.
An alliance of liberals led by Ahn could help the opposition rebuild itself in the absence of an alternative leader, but the possibility remains open that the former software mogul will choose to go it alone.
Ahn left for San Francisco shortly after casting his vote in the election, saying he will contemplate a way to return the love his supporters gave him.
Speculation is rife that Ahn could be planning to create a new party with an aim to run in the next presidential election in 2017.