The Swedish welfare state, once developed to create a new society based on social equality and universal rights, has taken on a partly new direction. Extensive choice reforms have been implemented in social services and an increasing proportion of tax-funded social services, including child day care, primary and secondary schools, health care, and care of the elderly, is provided by private entrepreneurs, although funded by taxes. Private equity firms have gained considerable profits from the welfare services. The changes have taken place over a 20-year period, but at an accelerated pace in the last decade. Sweden previously had very generous sickness and unemployment insurance, in terms of both duration and benefit levels, but is falling behind in terms of generosity, as indicated by increasing levels of relative poverty among those who depend on benefits and transfers. Increasing income inequality over the past 20 years further adds to increasing the gaps between population groups. In some respects, Sweden is becoming similar to other Organisation for Economic Co-operation and Development countries. The article describes some of the changes that have occurred. However, there is still widespread popular support for the publicly provided welfare state services.