England's 36-year winless streak against Sweden continued after Zlatan Ibrahimovic's second-half winner.
The Ajax striker stabbed home from close range after 53 minutes to sink an experimental England side.
England dominated the first 45 minutes, with Wayne Rooney and Owen Hargreaves hitting the woodwork.
The bright spot for England coach Sven-Goran Eriksson was Jermain Defoe's display after coming on as an early substitute for injured Darius Vassell.
England gave a debut to Celtic's Alan Thompson, but Eriksson's plans were disrupted by an early injury to Aston Villa's Vassell.
He stayed down clutching his ankle after a tackle from Villa team-mate Olof Mellberg after six minutes, and struggled on briefly before he was replaced by another debutant, Spurs striker Defoe.
13 mins: Wayne Rooney strikes the post
25 mins: Owen Hargreaves' free-kick hits the bar
53 mins: Zlatan Ibrahimovic scores Sweden's winner
He formed a lively partnership with Wayne Rooney, and the Everton striker almost broke the deadlock in the 13th minute.
Defoe's shot flashed across the face of goal, and Rooney stabbed a foot out but saw his effort strike the post and rebound along the line.
Owen Hargreaves was also cursing the woodwork after 25 minutes when he curled a right-foot free-kick on to the crossbar with Sweden goalkeeper Andreas Isaksson well beaten.
Sweden were barely a threat, and it took a fine save from Isaksson to deny Rooney from close range three minutes before the interval.
Vassell suffers his early injury
England made two more half-time changes, replacing Jonathan Woodgate and John Terry with Anthony Gardner and Gareth Southgate.
Sweden made five changes and they worked in their favour as they took the lead after 53 minutes.
The lively Ibrahimovic darted in front of Jamie Carragher to stab Kim Kallstrom's cross past David James.
It prompted a quartet of changes from Eriksson, with Gerrard, Rooney, Hargreaves and Thompson replaced by Joe Cole, Alan Smith, Emile Heskey and Jermaine Jenas.
But England were struggling to achieve cohesion and Kallstrom almost doubled Sweden's lead after 75 minutes, firing powerfully into the side-netting.
Phil Neville was having a nightmare evening and James needed to save well from Christian Wilhelmsson after he easily evaded the Manchester United defender.
Cole had a chance to snatch an equaliser for England in injury-time, but he fired over the top from only eight yards.
Sweden: Isaksson (Kihlstedt 45), Lucic, Mellberg (Hansson 45), Mjallby, Edman, Nilsson, Anders Andersson (Linderoth 45), Anders Svensson (Kallstrom 45), Wilhelmsson, Ibrahimovic (Ostlund 90), Elmander (Jonson 45).
Subs not used: Hedman, Christoffer Andersson, Dorsin, Farnerud.
England: James, Neville, Terry (Southgate 45), Woodgate (Gardner 45), Carragher, Hargreaves (Jenas 60), Gerrard (Joe Cole 60), Butt (Parker 78), Thompson (Smith 60), Vassell (Defoe 12), Rooney (Heskey 60).
Subs not used: Robinson, Mills, Green, Walker, Samuel, Wright-Phillips.
Referee: Tom Ovrebo (Norway).