As the count stretched into a second day, the republican party had 122 elected councillors at lunchtime, with gains achieved across the region.
The DUP has 104 council seats, the Alliance Party 46, the Ulster Unionists 44 and the SDLP 29, with 22 others.
Three of the 11 council areas have completed their count, Lisburn and Castlereagh, Mid Ulster and Armagh, Banbridge and Craigavon, where Sinn Fein has emerged as the largest party for the first time.
The party has also elected its first ever councillor in Ballymena and is on course to be the largest party in Derry and Strabane.
The DUP has retained its position as the largest party in Lisburn and Castlereagh with party figures insisting that it had been a good result for the largest unionist party.
The cross-community Alliance Party has made gains and could become the third largest party in local government.
Veteran PUP councillor Billy Hutchinson became the second party leader to lose his seat in Belfast, following Green Party NI leader Mal O’Hara’s failure to get elected.
The votes are being counted through the single transferable vote system, with 462 seats to be filled across 11 council areas.
The general pattern around voter turnout appeared to be up slightly in areas which would be regarded as predominantly nationalist/republican and down slightly in areas viewed as unionist majority.
It is the first electoral test for the parties since last year’s Assembly elections and takes place against the backdrop of the Stormont stalemate, with the powersharing institutions not operating as part of a DUP protest against post-Brexit trading arrangements.
Sinn Fein’s Stormont leader Michelle O’Neill described the results as “momentous”.
“It has been a very positive campaign, a very engaging campaign. People have very much engaged,” she told the BBC.
Ms O’Neill added: “It was about positive leadership, it was about a restoration of the executive, it was about making politics work, that has resonated with the electorate and they have come out in such strong numbers that we are now on course to have a very momentous election result.
“It is now obviously about what we are going to do next. In my opinion we need to double down in terms of getting an executive restored and getting our councils up and running again.
“But those councils will always do better when they are working in tandem with the locally elected ministers who support councils.”
DUP MLA Emma Little-Pengelly said it had not been a bad day for her party.
“Absolutely everybody threw everything at the DUP, it looks as if we will increase from the Assembly election in terms of our percentage share,” she told the BBC.
She added: “Sinn Fein are clearly consolidating in terms of the nationalist community, they are eating into a lot of the smaller party votes.
“It was predicted that Sinn Fein would have a good election, but it is the DUP that has been in the eye of the storm.
“Despite that people came out, they voted for the DUP, it is a very solid performance and we have gained seats in a number of the constituencies.”
Ulster Unionist leader Doug Beattie said he was disappointed at his party’s results.
“Of course I am disappointed. It has been a difficult election, at times it has been a brutal election,” he told the BBC.
He said: “We have lost some long-standing councillors, but we have also brought through some new fresh faces which is encouraging.”
He added: “It does take time, I said this when I took over as the party leader.
“I have been party leader for two years only, we have stuck with the same message for the last two elections and yes we haven’t had successes but we are in the first election cycle of my leadership, it is going to take more than one.
“We need to stick with it, we need to be inclusive, we need to be reaching out to as many people as we possibly can.”
SDLP leader Colum Eastwood said Sinn Fein had “cannibalised” the nationalist vote.
“It has been very clear when we have been speaking to people that people are really annoyed at the DUP, that they want the executive back up and running and they wanted to send a message.
“Sinn Fein asked them to send that message, and they sent it.
“They (Sinn Fein) have totally cannibalised much of the nationalist electorate.
“They were given a good hand and, to be fair, they played it very well, they ran a very good campaign and they deserve the victory they have today.
“Of course the DUP had as their first priority in their election literature to get back to Stormont, let’s see them put their money where their mouth is.”
Northern Ireland’s councils are responsible for setting rates, planning and waste collection as well as leisure services and parks.