Sweden was represented at the Eurovision Song Contest 1981 with the song Fångad i en dröm, written by Björn Skifs and Bengt Palmers, and performed by Skifs himself.

The Swedish participating broadcaster, Sveriges Television (SVT), selected its entry through Melodifestivalen 1981.

90 songs were submitted to Sveriges Television (SVT) for the competition.

It was the second time that Lasse Holm and Kikki Danielsson had been beaten into second place by Björn Skifs, after 1978.

At the contest, this year held in Dublin, Ireland, Sweden was drawn #20, at the very end of the start field.