The party overturned huge Conservative majorities to claim victory in the Mid Bedfordshire and Tamworth by-elections.
Labour leader Keir Starmer said the wins were “history in the making” for his party.
Tory bosses had hoped they could defy the dire national polls to cling on in both constituencies.
But it quickly became apparent as the votes were counted that Labour was heading for a momentous night.
In Mid Bedfordshire - Nadine Dorries’ former seat - Alistair Strathern overturned a majority of nearly 25,000 to become the constituency’s first Labour MP.
Meanwhile in Tamworth, the Tories’ near-20,000 majority crumbled to see Sarah Edwards elected on the back of a 24% swing to Labour.
If the massive swings away from the Tories were replicated at the next general election, it would leave Labour on course for a comfortable Commons majority and propel Keir Starmer to No.10.
Reacting to the results, Labour leader Keir Starmer said: “These are phenomenal results that show Labour is back in the service of working people and redrawing the political map.
“Winning in these Tory strongholds shows that people overwhelmingly want change and they’re ready to put their faith in our changed Labour Party to deliver it.
″Voters across Mid Bedfordshire, Tamworth and Britain want a Labour government determined to deliver for working people, with a proper plan to rebuild our country.”
Election expert Professor Sir John Curtice told the BBC: “Unless the Conservatives can fairly dramatically and fairly radically turn things around, they are in truth staring defeat in the face in 12 months’ time.”