The country sold 4 billion euros ($5.2 billion) in 10-year bonds at a yield of 4.83%, way up from 4.17% last month. The yield on five-year bonds rose to 3.59% from 2.94%, as 2.5 billion euros was auctioned.
Bond interest costs are a key measure of Europes effort to keep its debt problems in check. Higher rates mean more skepticism about an indebted countrys ability to pay.
Election results earlier this week fuelled concerns in the markets about the course a future government might follow.
The centre-left alliance led by Pier Luigi Bersani narrowly won the lower house, but failed to gain control of the upper house.
Its not clear what kind of coalition can be formed to give the country a government that can pass legislation.
Just over half of Italians that voted cast their ballots in favour of either the center right alliance of former Prime Minister Silvio Berlusconi or the Five Star Movement of former comedian Beppe Grillo.
Both have voiced opposition to the spending cuts and tax increases that have marked 15 months Mario Monti has been the countrys premier.
A new government that turns away from austerity could make it harder for Italy to take advantage of a European Central Bank (ECB) offer to buy bonds of indebted countries.
The announcement of this new policy last September helped calm concerns over Europes debt crisis and the future of the euro.
The bond purchases could potentially lower borrowing rates of those countries that ask for assistance. Yet the ECB will only make them if the country agrees to take specific steps to lower its deficit and debt.
The mere existence of the bond purchase offer has lowered the borrowing costs for Italy and Spain even though no bonds have been bought. The fear is that markets will no longer think Italy is protected by the program if a new government rejects deficit-reduction ahead of time.