Sodomy is punishable by jail in Muslim-majority Malaysia, and accusations that he sodomised a young male aide in 2008 had hung over the 64-year-old former deputy premier and his revitalised opposition.
But a judge on Monday cleared him of a charge that Anwar had condemned as a government set-up, freeing up the opposition's talismanic leader to wield his abundant charisma in elections due by March next year.
"Of course, the opposition will be very much boosted by this," said Ooi Kee Beng of Singapore's Institute of Southeast Asian Studies.
"It's a morale booster. This trial has been hurting the opposition, and Anwar personally, for a long time."
But the court ruling -- which brought praise from the United States and the European Union -- means Anwar must move beyond victimhood and articulate how he would govern and address bread-and-butter issues, analysts said.
Anwar gained sympathy both at home and abroad over his stunning ouster as the heir of Malaysia's Barisan Nasional (BN) coalition in a 1998 power tussle, after he pushed for market-friendly policies during the Asian financial crisis.
Jailed for six years on a sodomy conviction that was later overturned, he tapped into voter anger over BN abuses, corruption and inflation to lead the opposition to historic 2008 parliamentary gains that rocked the coalition.
"Anwar has capitalised on being a target of the ruling party. There is probably no politician anywhere who has faced the same level of attacks on his sex life," said Bridget Welsh, politics analyst at Singapore Management University.
"The challenge for him now is to go out there and tell people what are the real policies he can offer them."
Anwar told AFP after the verdict that the opposition would meet soon to hammer out an election manifesto detailing its policies and plans for governing.
One challenge for Anwar will be to connect better with rural Malays, said Ibrahim Suffian, head of the Merdeka Center, Malaysia's leading polling firm.
Muslim ethnic Malays make up 60 percent of the people, and rural folk have benefited greatly from decades of development policies under the BN government, he said.
Many rural Malays also harbour doubts about whether Anwar's multi-racial Pakatan Rakyat opposition alliance has their interests at heart, he added.
"This is a particular challenge for Anwar. The (ruling) coalition has been able to portray him as somewhat out of touch with Malay political insecurities," Ibrahim said.
"The (alliance) is only starting to try to make inroads in the Malay rural heartland and we will see in the months ahead whether they are successful."
Anwar must also persuade the country that the oft-feuding Pakatan Rakyat, or "People's Alliance", can effectively govern the resource-rich, developing nation given its mix of ethnic groups and economic ideologies.
The alliance includes Anwar's multi-racial Keadilan party, a conservative Malay Islamic party that favours an Islamic state, and a secular, social-democratic party representing Chinese and Indian minorities.
With Anwar bogged down in court, old disputes over religion and other issues flared up recently.
Ibrahim said the alliance has not convincingly demonstrated its cohesion, but that Anwar's freedom means "he can mediate between them and should be able to keep things on track".
Still, the entrenched ruling coalition headed by Prime Minister Najib Razak, who succeeded his ousted predecessor and has not yet faced voters, poses a formidable obstacle.
Facing pressure from an increasingly sophisticated electorate -- including a massive July protest against electoral abuses -- Najib has cast himself as a reformer, vowing to scrap oppressive laws and other authoritarian vestiges.
He can now plausibly point to the Anwar ruling and the apparent lack of meddling to secure a guilty verdict as evidence that the campaign is not mere window-dressing, as Anwar alleges, analysts said.
"I really think Najib comes off stronger from this. It shows he is willing to stand up to the electorate and be judged in a fair fight rather than engaging in the gutter politics of old," Welsh said.
But she added that "the biggest winners (in Anwar's acquittal) are the Malaysian people".
"This opens the door to a potential new era. It's too early to say whether everyone is going to walk through it, but it really lets some fresh air in."