Hogan, 58, ran on a promise to curb state spending and cut taxes. He will become Maryland's second Republican governor in half a century, and will face a Democratic-controlled legislature that may not be willing to help him.
Brown conceded defeat shortly after midnight.
Hogan spokesman Adam Dubitsky acknowledged Maryland remains a Democratic stronghold but said voters wanted change.
"It's not a realignment. It's not turning a blue state red," Dubitsky said. "It's people who are tired of the last eight years."
Brown, a retired Army colonel and Harvard-educated attorney, campaigned as the candidate to continue Gov. Martin O'Malley's policies on education and the environment. It was a platform that some Democrats said invigorated them, and others said made them vote for a different direction.
Brown piled up strong majorities in Baltimore city and the Washington suburbs but could not overcome a dismal showing in rural Maryland and suburban Baltimore. The lieutenant governor narrowly won the early voting, but Hogan swamped him with an Election Day surge.
The governor's race offered voters a sharp contrast between Hogan's laser focus on economic issues and Brown's broad pledge to create "a better Maryland for all Marylanders."
As Hogan relentlessly hammered on the need to cut taxes, Brown eventually pledged not to raise them.
Critics said Brown failed to offer a clear vision to voters, instead working to portray Hogan as a "dangerous" Republican who would seek to overturn Maryland's abortion rights and gun control laws.
Hogan repeatedly denied that. The Republican portrayed Maryland as a state in economic crisis, with businesses and individuals moving elsewhere because of high taxes and burdensome regulations. He promised to roll back what he called O'Malley's "40 consecutive tax increases," but offered no specifics on how he would pay for that.
Brown, meanwhile, told voters he'd work to close the gap between Maryland's most and least prosperous. As the signature issue of his campaign, Brown said he would gradually offer free pre-kindergarten to all Maryland 4-year-olds. Skeptics questioned whether he had a realistic plan to pay for it.
Hogan attracted critics of his own. He argued he could cut state spending without reductions in public services, insisting he could find the savings by eliminating waste, fraud and abuse in state government. Detractors doubted that he could deliver on his promises, charging that his numbers didn't add up — especially after independent reports showed his $1.75 billion waste-cutting plan was riddled with errors.
Yet Hogan's message that Maryland residents are overtaxed and the state needs a new direction resonated for many voters in both parties.
Shannon Laue, a 43-year-old beautician from Abingdon in Harford County, pointed to high tolls and the stormwater assessment fee, derided by critics as a "rain tax," as reasons she voted for Hogan.
"I can't tell you how many people are leaving Maryland and moving to Pennsylvania because of the tax increases," the registered Republican said.
In East Baltimore, lifelong Democrat Stephen Wheeler, 46, said he was disillusioned enough with Brown to cast a ballot for Hogan. "Honestly it's definitely time for a change," he said.
Many Brown voters emphasized their loyalty to the Democratic Party, and suspicion of Republicans.
Mary Forbes, 90, said she's never voted for a Republican and wasn't about to start now. "I was just voting against Hogan," said Forbes, who lives in Capitol Heights in Prince George's County. "By being a Democrat, I vote for Democrats. I don't split the ticket."
But Lillian Chambliss, an independent from Bowie, said she liked Brown's emphasis on early childhood education. She said he struck her as an honest man who delivers on his promises.
"I believe he has a genuine heart," said Chambliss, a 57-year-old personal trainer. "He wants to make everything better. Hopefully, he's going to make it better for everyone."
Baltimore City Councilman Robert Curran counted votes in his north Baltimore district, a Democratic stronghold. He said 10 percent of voters chose to skip the governor's race and only voted for down ballot Democrats.
"I've never seen anything like it," he said.
Rep. Dutch Ruppersberger noted that the Republican surge was a nationwide trend, pointing out that Democrats could lose 15 seats in the House of Representatives.
"This is a message being sent across the country," he said. "Brown needed to define himself in the Baltimore region. ... What happened? He's a good man. He should have defined himself more as a military leader."
Brown's bid for governor came after serving eight years in the Maryland General Assembly and two terms as O'Malley's lieutenant governor. In the June primary election, Brown cruised to victory by a 27-point margin, having earned the endorsement of nearly every major Democratic official in the state.
In both the primary and general, he came under fire for Maryland's botched health insurance website, a centerpiece of health care reform that Brown oversaw as lieutenant governor. Brown said he, like everyone else involved, bore responsibility for its failure.
On the campaign trail, Brown often invoked his background as a first-generation American, the son of a Jamaican physician and Swiss homemaker. He emphasized his military service, including his five years of active duty as helicopter pilot and a 10-month deployment to Iraq in 2004 with the Army Reserve. Brown, father of two, ran campaign ads that highlighted the joy of raising his adoptive son, Jonathan.
But most of his television campaign focused on attacking Hogan.
In a state with twice as many registered Democrats as Republicans, Brown held a fundraising and organizational advantage from the start.
By mid-October, Brown and Maryland Democrats had already spent a total of $19.5 million on Brown's campaign for governor, records show.
Hogan and Maryland Republicans had spent $4 million.
Hogan was a cabinet secretary in the administration of GOP Gov. Robert L. Ehrlich Jr. but has never held elective office. He considered running for governor in 2010 against O'Malley, but bowed out when his former boss sought a rematch.
Ehrlich was the last Republican to win statewide office. In 2002, he wrestled the governor's mansion away from Democrats by just a 3.9 percentage points.
He grew up in a political family and intermittently worked behind the scenes in Republican politics for most of his adult life. His father, Larry Hogan Sr., was a congressman and the last Republican to serve as Prince George's County executive. His father mounted an unsuccessful bid for governor in 1974, a milestone Hogan recalled at a rally Sunday when he said, "Dad, we're finally going to get a Larry Hogan as governor."
In 2011, Hogan formed the political advocacy group Change Maryland, gathering research he would later use as political ammunition in race for governor.
He made the unusual choice to finance his run for governor using Maryland's public financing system, the first candidate to do in two decades. The decision gave him a $2.6 million in public money, but curtailed the amount he could spend. The state's Republican Party was allowed to spend another $3.7 million on Hogan's behalf.
In contrast to Brown's barrage of negative television ads against Hogan, the Republican's ad mostly stressed he was a small businessman who wanted to improve the economy of his state. One ad featured his daughter Jaymi Sterling defending her father as a supporter of women's rights.
Linda Quinn of Edgewood, 62, voted for Hogan and the rest of the Republican ticket. She poked fun at Brown's warning that Hogan would take Maryland "backwards."
"I hope he takes us back when everything was cheaper," she said.
Baltimore Sun reporters Luke Broadwater, Ian Duncan, Kevin Rector, Yvonne Wenger and Timothy B. Wheeler contributed to this article.