The much-awaited Janata Dal-United legislature party meeting was attended by party president Sharad Yadav.
"Nearly 100 of 115 JD-U legislators attended the meeting and elected Nitish Kumar as their new leader," a JD-U leader said.
Yadav had called the meeting amid speculations that Bihar Chief Minister Jitan Ram Manjhi would be replaced.
The meeting assumes significance as Manjhi refused to resign despite pressure from the party and Saturday recommended dissolution of the Bihar assembly.
Manjhi's decision was supported by seven ministers, but 21 ministers, considered close to Nitish Kumar, rejected it.