Reinfeldt's four-party Alliance gained one extra seat at the expense of the left-wing opposition after votes cast by Swedes living abroad were counted, giving it with 173, two short of a majority, election authorities said.
Reinfeldt, whose bloc took 49.28 per cent of the vote, must now seek alliances with left-wing opposition parties to form a government.
The 45-year-old outgoing prime minister has already ruled out any deal with the far-right Sweden Democrats, which enter parliament for the first time with 20 seats.
The Social Democrats and their left-wing opposition coalition partners the Greens and the former communist Left Party took 43.6 per cent and 156 seats, while the Sweden Democrats won 5.7 per cent of the vote.
Turnout in Sunday's election was 84.63 per cent. Reinfeldt and other party leaders have kept a low profile since Monday, saying they would wait to discuss the future government make-up and possible new alliances until after the final results are in.
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