"The arrested man is suspected of having, at the request of another country, illegally gathered information about people in the Tibetan community in Sweden," SAPO said in a statement.
"The information has been passed on to intelligence officers working for a foreign power," it added.
The man was arrested yesterday.
SAPO would not disclose his name or nationality, nor which country he was working for or where in Sweden he was spying.
SAPO refused to say whether the foreign power involved was China.
Beijing says it "peacefully liberated" Tibet in 1951 and considers it an inseparable part of China.
According to Swedish news agency TT, the suspect has lived in Sweden for several years.
The head of the organisation Tibetan Community in Sweden, Nyima Sherlhokangsar, says some 130 Tibetans live in the Scandinavian country.
"We are shocked over this news... We have not suspected anything," she said.
Refugee espionage is usually aimed at preventing people from expressing criticism against the regime in their home countries.
Regimes also spy on refugees to find out who has fled the country, why, and where they are now -- or to put pressure on family members who have stayed behind.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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