Long queues were seen when polling booths opened at 7 a.m. The voting will continue till 6 p.m., election officials said.
Over 2.19 lakh voters are eligible to exercise their franchise at 255 centres.
For the first time, the Election Commission is using the Voter Verified Paper Audit Trail (VVPAT), which helps the voters know the candidates they voted for.
VVPAT attached to the Electronic Voting Machine (EVM) displays for seven seconds the name of the candidate the voter cast ballot for.
Tight security arrangements have been made across the politically sensitive constituency to ensure peaceful and fair polling.
More than 2,500 police personnel, six units of central paramilitary forces, 15 platoons of the Armed Reserve and Special Police were deployed.
A drone camera, 259 body-on cameras and 60 CCTV cameras were used to monitor the polling.
The police also set up a command and control centre to monitor the situation.
The election authorities monitored polling process through web casting cameras. More than 1,600 polling personnel were deployed.
The bypoll were necessitated after the death of Bhuma Nagi Reddy, who had quit the YSR Congress party to join the ruling Telugu Desam Party (TDP) last year.
There are 15 candidates in the fray, including Bhuma’s nephew Brahmananda Reddy of the TDP, Silpa Mohan Reddy of the YSR Congress and Abdul Khader from the Congress.
It is a direct fight between the TDP and the YSR Congress. Both the parties are treating it as a fight for prestige.
The constituency witnessed high-voltage and acrimonious campaign led by Chief Minister and TDP President N. Chandrababu Naidu and YSR Congress chief Y.S. Jaganmohan Reddy.
The stakes are high for both the parties as the result will be seen as a referendum on the performance of TDP-BJP government and indicate which way the wind will blow in 2019 election.
The Congress accused both the parties of spending huge money to lure the voters and demanded postponement of the by-election.
Independent observers have described it as the costliest ever by-poll.
The counting of votes will be taken up on August 28.