The 28-year-old singer, of Vasteras, is the first Swedish winner of the European music contest since 1999, when Charlotte Nilsson won, The Local.se reported.
"I want to say that I love you so much and thank you for believing in me," Loreen said before taking the stage for the encore performance of her winning song, "Euphoria."
"I wouldn't have been able to do it without you. This is ours together," she added.
A group of singing grandmothers from Russia, Buranovskiye Babushki, won second place and Serbian crooner Zeljko Joksimovic took home third, The Local.se reported.
With Loreen's win, Sweden is now responsible for hosting next year's Eurovision contest.