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Polls opened at 7:00 am (0400 GMT) and were due to close in most areas at 10:00 pm.
At one Jerusalem polling station, a trickle of voters arrived to cast ballots just after opening time.
The stakes could not be much higher for the 69-year-old right-wing leader who, as in April polls, faces a strong challenge from ex-military chief Benny Gantz and his centrist Blue and White alliance.
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The first exit surveys will be released just after polls close, while official results are not expected until Wednesday.
Opinion polls have indicated another tight race, showing Netanyahu’s Likud and Blue and White winning around 32 seats each in the 120-seat parliament.
Both Netanyahu and Gantz paid a last-minute visit Monday night to Jerusalem’s Western Wall, the holiest site where Jews are allowed to pray. Netanyahu enters the election after having suffered one of the biggest defeats of his political career following the April vote.