Mr Wood was the favourite but his team was thrilled with the size of his victory - capturing 66% the vote (11,170) to National list MP Parmjeet Parmar's 28% (4652). Businessman Roshan Nauhria, founder and candidate for the NZ People's Party, came third with 709 votes.
Turnout was just under 39%. Special declaration votes still to be counted.
In 2014, long-serving MP Phil Goff secured 57% of the vote, to Ms Parmar's 32%.
Prime Minister John Key said this week that Mr Little's leadership couldn't survive if Ms Parmar won, and Mr Little singled out Mr Key in his comments after Wood's victory on Saturday.
He came here flouncing around and he seemed to forget that the purpose of an election campaign is to win votes, not selfies."
Mr Wood said he didn't expect such a big win.
"To end up 6500 [votes] ahead is an enormous swing. I want to thank all the people of Mt Roskill who have put their trust and confidence in me and Labour."
Mr Wood will now take the reins from Mr Goff, who retired from Parliament to become Auckland's mayor.
Mr Wood told the crowd, which included deputy leader Annette King and MPs including Phil Twyford and Grant Robertson, that Phil Goff had been a mentor.
He thanked his wife Julie Fairey first, and then campaign manager Shayne Misselbrook. Just 27 years old, Mr Misselbrook will start a new job at Meredith Connell on Monday.
Apart from a three-year break between 1990 and 1993, Goff has been the Mt Roskill MP since 1981, and had an 8000 majority in 2014.
In 2014, National got 14,275 party votes - 2000 more than Labour - but a quarter of National voters opted for Mr Goff.
His departure gave National the chance of an upset win, but a Labour campaign that focussed on turning out its supporters has seen him easily fend off the challenge from Ms Parmar.
Speaking to media at her event at Frolic cafe in Royal Oak, Ms Parmar said she was disappointed in the result but proud of her campaign: "History wasn't on my side and history was proven right."
She said she would be putting her name forward to contest the seat again.
Senior National MP Steven Joyce took the opportunity to have a dig at Mr Little.
"I'd be keen for him to take as much as possible out of tonight but I don't think you can read too much into it. It's a safe Labour seat. The Greens, New Zealand First didn't stand and it's never been done for a Government to win an opposition seat in a byelection."
Mr Little pre-empted that response in his speech to the Labour crowd. Despite any "spin", he said National thought they could win, evidenced by the Prime Minister's seven trips to Roskill during the campaign.
"They had one thing going for them, and it was the Prime Minister. And they have lost. The result tonight is absolutely outstanding.
"For a seat where National won the party vote in the last election, this is a real wake-up call to them."
