The suspect, a 38-year-old Swede with a gun licence and no criminal record, has denied the allegations, investigators said yesterday.
He was taken into custody at his home on Saturday in the southern city of Malmo, questioned then arrested on suspicion of one murder and seven attempted murders, police spokesman Borje Sjoholm told reporters.
"The reason we became interested in this man was tip-offs from the public," he said in Malmo, adding that two weapons were also seized.
Malmo police have been looking for a lone gunman they think is responsible for more than a dozen unsolved shootings since October 2009. The victims - nearly all with immigrant backgrounds - have been shot at bus stops, in their cars, and through the window of a gym.
Forty per cent of Malmo's 300,000 residents are first- or second-generation immigrants and the shooting spree came amid growing tensions over immigration.
The far-right Sweden Democrats entered parliament for the first time in the September 19 election, winning 20 of the 349 seats. Their support is strongest in southern Sweden, including pockets of Malmo, where some ethnic Swedes blame a high crime rate on the influx of immigrants from the Balkans, the Middle East and Africa.
While investigators won't speculate on a motive, Swedish media have drawn parallels to a racist gunman who terrorised immigrants in Stockholm in the early 1990s. Dubbed "the laser-man" because of the laser sight he sometimes used, John Ausonius evaded capture for nearly a year. Once caught, he was convicted of one murder and nine attempted murders and is now serving a life sentence at a high-security prison.
The first shooting was on 10 October, 2009, when a 21-year-old convicted drug smuggler on release from prison was shot in the head in a parked car. Swedish media said he was hospitalised for a month with a bullet in his brain but survived. A 20-year-old woman sitting next to him was also hit in the head and died.
Police say the weapon in that shooting is the same one as was used in several other attacks.
Lang Conteh, a 41-year-old from Gambia, said he thought the shots were fireworks when he stepped out of a taxi outside a Malmo nightclub on June 26.
Then he spun around and saw his Jamaican friend on the ground. A bullet had grazed his trouser leg.
"You didn't hear the gunshots?" his friend asked, shocked.
"No," said Mr Conteh. "This is fireworks."
"I come from Jamaica and I know when I hear gunshots," the friend replied.
In September, a 47-year-old Somali man was shot at a Malmo bus stop.Another man was gunned down October 19 while waiting for the bus at a different location.
"There is a lot of fear. People are afraid to go out at night, in the morning and even during the day," said Bejzat Becirov, head of the Islamic centre that runs Malmo's mosque.
Naser Yazdanpanah, a 57-year-old tailor from Iran, believes he confronted the gunman after a shot was fired on October 23 at his shop when he was ironing trousers. He said he rushed out on the street and tried to stop the shooter.
"I started screaming for help, hoping someone would help," Mr Yazdanpanah said. "He jumped, head-butted me and broke two of my teeth. Then he fell down, I lost my grip and I couldn't catch him, and he ran away."
Malmo police chief Ulf Sempert called the arrest good news.
"Malmo residents will get a positive feeling from this," Mr Sempert said.