Firefighters arrived at the site at 2 a.m. local time (0000GMT) but the mosque was completely gutted, according to Orebro fire chief Ulf Jacobsen.
No one was injured in the blaze, Jacobsen said, adding that evidence pointed to it being an arson attack.
The Orebro mosque -- which has a capacity for 250 people -- was built in 2007 in the Vivalla neighborhood, home to Muslims from various countries.
The incident came after another suspected arson attack last May partially destroyed a Shiite mosque in the Stockholm suburb of Jakobsberg.
The arson incident comes after far-right extremist Swedish politician made sacrilegious remarks against the Holy Qur'an and Muslims.
Speaking a gathering of Swedish Democrats Mattias Karlsson claimed “the church has become a force for Islamization of Sweden “. As an example, Karlsson mentioned imams invited by the Church of Sweden and read from the Qur’an. He went on to compare the Holy Qur'an with Adolf Hitler’s book “Mein Kampf”.
Karsson is a major supporter of US President Donald Trump whom he shares anti-Muslim ideology.
An investigation by the Islamic Cooperation Council in Sweden revealed in 2015 that seven out of 10 mosques in the country had been attacked.
Sweden is a strong draw for many migrants and about 15 percent of its population was born abroad.
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