Swedish foreign policy is based on the premise that national security is best served by staying free of alliances in peacetime in order to remain neutral in the event of war. In 2002, Sweden revised its security doctrine. The security doctrine still states that "Sweden pursues a policy of non-participation in military alliances," but permits cooperation in response to threats against peace and security. The government also seeks to maintain Sweden's high standard of living. These two objectives require heavy expenditures for social welfare, defense spending at rates considered high by west European standards (currently around 2.2% of GNP), and close attention to foreign trade opportunities and world economic cooperation. Priorities in Swedish foreign policy include human rights, conflict management/resolution, nonproliferation, the environment, and building an influential role for Sweden within the European Union while maintaining a strong transatlantic link. Sweden places great importance on international law and multilateralism.

Sweden participates actively in the United Nations and other multilateral organizations. The strong interest of the Swedish Government and people in international cooperation and peacemaking has been supplemented in the early 1980s by renewed attention to Nordic and European security questions. In January 1995, Sweden became a full member of the European Union after a referendum in late 1994 indicated that 52.3% of participants wanted to join. Sweden became a member, in part due to its increasing isolation outside the economic framework of the Maastricht Treaty. It is an active member of NATO's Partnership for Peace and the Euro-Atlantic Partnership Council. As of September 2003, Sweden had about 1,000 troops deployed in peacekeeping operations overseas, including the Balkans, Congo and Afghanistan.

Swedish foreign policy has been the result of a wide consensus. Sweden cooperates closely with its Nordic neighbors, formally in economic and social matters through the Nordic Council of Ministers and informally in political matters through direct consultation.