The territory's first presidential election was the last major step before East Timor becomes the world's newest nation next month, and offered voters a choice between the charismatic Gusmao, who for years led a resistance movement against Indonesia, and veteran politician Francisco Xavier do Amaral.
"I'm really happy to come here, I want to vote for a president who will make my country a better place," said Angelina Saldanha, 28, before casting her vote at the Santo Paulus school in the seaside capital Dili.
Turnout started slow but picked up during the day. At a news conference after polls had closed the Independent Electoral Commission estimated 86.3 percent of the around 430,000 eligible voters had cast ballots.
"I just want to say that a turnout of 86.3 percent is anywhere in the world considered an excellent result," said IEC chief electoral officer, Carlos Valenzuela.
Voters, dressed in their Sunday best, had begun their trek along East Timor's dusty and potholed roads from dawn Sunday to cast their ballots.
Counting of the votes was to begin Monday with official results due Wednesday, but indications of the likely winner are anticipated before that.
Gusmao, whose popularity extends across East Timor, is expected to crush aging rival Amaral in the race for the largely symbolic post.
The former guerrilla leader, in a blue open-necked shirt, appeared more relaxed than Amaral as the two walked arm-in-arm to cast their votes at the Santo Paulus school.
Greeted by smiles from onlookers, including a group of curious nuns returning from mass in the staunchly Roman Catholic territory, both men showed their fingers blackened with ink to madly flashing media cameras.
Voting was peaceful and orderly, officials said, and UN administration spokeswoman Barbara Reis praised the East Timorese for the "maturity, security and tolerance" they showed in this and last year's elections.
The presidential elections mark the third landmark vote for the Timorese, following the bloody independence vote in August 1999, and a vote in August 2001 to elect an 88-member constituent assembly to draft the new nation's constitution.
The United Nations has run the territory since the vote to break from Indonesian rule in 1999.
With the result almost a foregone conclusion, the focus has been mainly on the challenges facing Gusmao as his country braces for full independence.
One of the key concerns raised by observers is whether he will be able to work with the ruling Fretilin party, although Gusmao has said there's no tension between them just differences of opinion.
The vote was observed by 72 East Timorese and 35 international groups.
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