The prime minister is nominated by the speaker of the Riksdag and is elected by the chamber by simple majority, using negative parliamentarianism.

Prior to the creation of the office, Sweden had no official head of government separate from the king; the country in periods was an absolute monarchy.

The office of Lord High Chancellor was commonly the closest role to a de jure head of government, and they had similar responsibilities to the modern Prime Minister during the so-called Age of Liberty; no governmental offices were called Prime Minister at the time.

At the same time, it stripped the monarchy of even nominal political powers, making the cabinet the country's executive authority in both name and in fact.

In the two neighboring Scandinavian monarchies, the monarch is the nominal chief executive, but is bound by convention to act on the advice of the ministers.

However, the so-called Torekov Compromise reached in 1971 by the major political parties, codified with the Instrument of Government that went into effect in 1975, stripped the Swedish monarch of even a nominal role in governmental affairs, thus codifying actual practices that had been in place since the definitive establishment of parliamentary government in 1917.

The formal change of government, and thus the start of the term for the new prime minister takes place at a Council of State at the Royal Palace.

In 2022 with the appointment of Ulf Kristersson, however, speaker Andreas Norlén handed it over during the meeting of the Council of State after asking for and receiving the Kings approval to do so, a pure formality.

The prime minister can dissolve the Riksdag, even after receiving a vote of no confidence, except during the first three months after an election.

Harpsund, a manor house in Flen Municipality, Södermanland County, has served as a country residence for the prime minister since 1953.

The manor is also frequently used for governmental conferences and informal summits between the government, industry and organisations in Sweden.