On October 27, 2008, Stevens was convicted on seven charges of ethics violations and corruption. If reelected, Stevens would have been the first convicted felon elected to the United States Senate. On November 18, 2008, the Associated Press projected that Begich had defeated Stevens, making Stevens the longest-serving U.S. Senator ever to lose a re-election bid. Stevens conceded the race to Begich on November 19.
Stevens was perceived by many as corrupt, but was also highly regarded by many Alaskans for his ability to steer federal funding toward the state; he was the longest-serving Republican in the Senate entering 2008 (first elected in 1968), and through his seniority he amassed a great deal of influence there. The selection of Alaskan Governor Sarah Palin as the vice-presidential running-mate of Republican presidential candidate John McCain in late August 2008 coincided with a substantial improvement in Stevens' performance in opinion polls. A poll in August showed Begich with a 17% lead, but in early September a poll from the same source showed Begich leading Stevens by only 3%. Begich's campaign and some observers attributed this change to Palin's popularity and the enthusiasm stimulated by her selection, although Palin's own reputation was partially based on her perceived opposition to Stevens or distance from him. The Stevens campaign disputed the low numbers shown in the August poll and said that the numbers had improved in September because Stevens had begun heavily campaigning. His campaign also presented the relationship between Palin and Stevens as positive, contrary to some portrayals.
Stevens was convicted of seven felony counts of failing to report gifts on October 27, 2008. This was considered a serious setback in his already difficult bid for re-election; he had requested and received a quick trial in hopes of winning an acquittal before election day. After the verdict, Stevens maintained his innocence and said that he was still running for re-election.
With three and a half weeks to go before the primary, Stevens still held a large polling lead over chief rival Dave Cuddy, 59% to 19%. Political newcomer Vic Vickers said on July 28 that he expected to pour $750 000 of his own money into his bid to defeat Stevens. According to Rasmussen polling of Alaskans, Cuddy "does nearly as well against Begich" as Stevens, trailing Begich 50% to 35%, while Vickers trailed the expected Democratic nominee 55% to 22%.
Begich won the election by 3,953 votes. Incumbent Stevens had held a lead of over 3,000 votes after election night, but a tally of nearly 60,000 absentee and mail-in ballots released on November 12 erased that lead and reduced the vote margin separating the candidates to less than 0.5%, with further counting, released on November 18, increasing the margin to more than 1% in favor of Begich. On November 19, 2008, Stevens conceded to Begich.