Lofven lost the vote with 181 MPs backing the motion, 109 supporting him and 51 abstaining.
Swedish Prime Minister Stefan Lofven lost a no-confidence vote on Monday morning.
He now has one week to decide whether to resign or call for a snap election.
Lofven, from the Social Democratic party, had been in power since 2014. He is the first Swedish prime minister to lose a vote of no-confidence.
The motion against him was brought forward by the Left party, an ally of the minority government made up of a coalition between the Social Democrats and the Green Party.
According to the Swedish Constitution, a snap election would come on top of next year's planned ballot and would therefore see the Swedes brought to the polls twice in a little over a year.
If he resigns, he could theoretically find himself at the helm of a caretaker government.
The bust-up with the Left Party is over planned reforms to the country's rental controls.
Lofven lost the vote with 181 MPs backing the motion, 109 supporting him and 51 abstaining. The Left Party was supported by the far-right Sweden Democrats and by the Conservative Moderate Party and Christian Democrats — both right-wing.