Lib Dem Jayne Phoenix was elected with 57 per cent of the vote share, a swing of 43 per cent from the Tories.
The election in Bridlington was called following the death of Conservative councillor Chad Chadwick aged 79, just weeks before his 80th birthday in April.
Coun Phoenix said: “I’d like to thank the residents of Bridlington for putting their faith in me and the Liberal Democrat team.
“This landslide victory has sent the Conservatives a message - they cannot keep taking residents for granted. "
Her election brings the number of Lib Dem councillors on the Tory-run authority to 12.
Group leader David Nolan said people were "fed up with the Conservatives locally and nationally and they want a change", adding: “Conservatives right across the East Riding ought to be looking over their shoulders because Liberal Democrats are coming for them.”
Another by-election will be held in Beverley Rural ward over the summer following the death of Pauline Greenwood.
Councillor Greenwood died unexpectedly on Wednesday, June 1, at the age of 86.
The Conservatives's candidate in Bridlington Jonathan Bibb said they would be watching to see if the Lib Dems delivered on promises to upgrade the town's hospital, and thanked his campaign team "who have worked incredibly hard to run an honest campaign on issues which ERYC councillors have the powers to control."