They saw 34 councillors elected across the Kingdom., and came within four seats of a majority.
David Alexander, group leader, hailed it as a phenomenal achievement.
The party, which went into the count with 29 seats, fielded 39 candidates, and needed 38 to win in order to take outright control.
Mr Alexander admitted the returns even surpassed their own expectations.
“We thought we’d hit 32,” he said. “We were two short by 90 votes in two Kirkcaldy wards.
“But it is a phenomenal achievement.”
Labour saw their representative drop from 24 to 20 seats at the council chamber, while the Tories lost seven councillors, but perhaps fared better than some predicted with eight seats after the counting had been completed.
The Lib Dems saw their numbers swell by six to 13.
Now the hardball begins to get agreement to run Scotland’s third biggest local authority for the next five years.
Mr Alexander said: “We will work with anyone who is prepared to do what is best for the people of Fife - but not the Tories.
“The single biggest issue is the cost of living crisis, and they caused it.”
He admitted the SNP needed to find common ground with either Labour or the Lib Dems to ensure a smooth operation going ahead.
“You can’t run with a council of this size with a minority administration,” he said. “We cannot guess every month if our programmes will get through.
“It is all about what is best for the people of Fife.”
David Ross, Labour group leader - who formed a co-leadership with Cllr Alexander in a joint administration after the 2017 elections - said: “There will be a strong Labour representation in our council, and we will protect local services as far as we can.”
The count, held at Rothes Halls in Glenrothes, produced some shock losses and surprises.
Tories Andy Heer and Tony Miklinksi lost their seats in north-east Fife, while Richard Watt failed to gain re-election in Kirkcaldy East, and David J. Ross went in Dunfermline South, but they also picked up wins elsewhere.
For the SNP, Zoe Hisbent lost out in Kirkcaldy Central, but Brian Goodall bounced back in Rosyth.
Labour suffered some losses, and the biggest shock came in Kirkcaldy North where the Tories’ James Leslie secured a seat by defeating Ryan Smart who had been lined up to replace the long-serving Neil Crooks.
Instead, the Tory - the father of Burntisland, Kinghorn and Western Kirkcaldy councillor, Kathleen Leslie - won the vote to create a unique family double at Fife House.
In the East Neuk and Landward councillors John Docherty and Linda Holt, who stood as independents, both lost their seats.
There was also no breakthrough for the Greens, who were bidding to win a first-ever council seat, or Alba who polled poorly across the wards.
No independent candidates were successful, leaving the council comprised of the four main political parties.