Pauline Hanson's party was ahead of Labor, with just 22 per cent of votes counted at the Secret Harbour by-election.
Luke Herdegen held a 1.45 per cent lead over Labor's Georgia Tree, WA Electoral Commission figures showed late on Saturday AEST.
Voters in the safe Labor seat cast their ballots on Saturday after senior minister Paul Papalia's mid-term retirement triggered the contest.
Mr Herdegen has been buoyed by a sea of polling booth orange across the beachside state electorate, south of Perth.
"The vibe has been really strong for the last six weeks," he told AAP.
"We're feeling confident but ... it's a big margin. The swing is definitely on but it's just a matter of how big."
WA Premier Roger Cook wasn't throwing in the towel but conceded it would be a battle to hold the outer-suburban mortgage-belt electorate despite Labor's 11.5 per cent margin.
"It would break my heart," he said when asked about defeat.
"By-elections bring up all kinds of opportunities for a whole range of issues to impact on the seat."
On the ground in Secret Harbour, Labor is on the nose, with cost-of-living pressures, housing and a perceived lack of community amenities topping lists of voter concerns.
Local Luke Pors voted for One Nation and believes it will do a better job than either Labor or Liberal.
"We know what their true goal is and I think just in One Nation we trust," he said.
The Qantas flight attendant was also impressed by Mr Herdegen's campaign.
"He's like a home buddy and as obviously a youngie; we can really connect with him," he said.
Retirees Ann and Les Scard also voted One Nation.
"It has been a pretty strong campaign by Luke Herdegen," Mr Scard said.
"He deserves a chance.
"I get the impression Liberal and Labor are desperate; they're doing everything to try and discredit them and I don't think they're being successful."
Mrs Scard isn't concerned by One Nation's controversial immigration policy.
"I agree with a lot of what Pauline Hanson says," she said.
"Something has to be done, it's just all askew."
Mr Herdegen believes people are desperate for change.
"They're struggling with cost of living; there's a major housing issue here with the mass immigration coming through and people have just had enough," he said.
Retired truck driver Dean Maxwell isn't so sure. He voted Labor.
"I didn't vote for One Nation, I put them last," he said.
"I just don't see any good policy.
"I don't like any of the pollies but I particularly don't like Pauline Hanson.
"I think she's in Gina Rinehart's pocket."
Labor candidate Georgia Tree said she would fight until the polls closed but admitted protest votes against the status quo could hurt her prospects.
"It's been an absolute rollercoaster," she said.
One Nation's performance in the tradie-haven will be of interest across the nation, particularly Victoria, which has a state election in November.
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