Swedish police said on Tuesday they had detained one person on suspicion of espionage and a second individual believed to have aided the suspected crimes.
The main suspect was believed to have conducted gross unlawful intelligence activity against Sweden as well as another country, the Swedish Security Service said in a statement.
Police did not name the other country believed to have been targeted.
The two suspects were arrested in Stockholm and there was no connection to any other ongoing investigations, the security police said.
"Sweden must not be a platform for foreign powers to conduct unlawful intelligence activities, either against Sweden or against other countries," a security police spokesperson said. "It is within the scope of this that we are conducting this investigation."
They did not say whether the suspects were Swedish or foreign nationals, or identify on whose behalf they were accused of spying.
Several houses were searched as part of the police raid on Tuesday, and a third person was brought in for questioning, they added.
Sweden's national prosecutor's office confirmed the arrests and said it must decide by midday on Friday whether to release the suspects or seek a court's approval to keep them in detention.
(Reporting by Anna Ringstrom; Editing by Terje Solsvik and Alex Richardson)
