Opinion polls put Fredrik Reinfeldt's four-party centre-right alliance just ahead of a bloc led by the Social Democrats, who have ruled Sweden since 1994 and held sway for six of the last seven decades.
About 6.9 million voters are expected to cast their ballots on Sunday, weighing the ruling party's promises of a generous welfare system against the centre-right's pledges of tax and benefit cuts to stimulate job growth.
A new poll released by Dagens Nyheter newspaper late on Saturday showed the opposition lead over the Social Democrats and their Green and Left party allies had grown to nearly seven percentage points, the widest margin this year.
Goran Persson, the prime minister and leader of the Social Democrats, has said he has no faith in such surveys.
Voting starts at 8am (0600 GMT) and ends at 8pm. The Election Commission expects a preliminary result on Sunday by about 10.30pm.
Swedes, who will elect 349 members of parliament, have one of the highest tax burdens in the world, but many still believe in the principle of a tightly woven social safety net.
Reinfeldt, 41, says his alliance with the Folk Liberal party, the Centre party and the Christian Democrats does not want to dismantle the welfare system, only to fine-tune it to make it more job-friendly.
Reinfeldt also plans to privatise about 200 billion Swedish crowns ($27.6 billion) worth of state-owned shares in listed companies over the next four years.
Voter mobilisation is crucial for Persson because weak turnout is traditionally seen as a negative factor for the Social Democrats. He spent the last day before the election urging voters to turn out on Sunday.