He participated in a joint prayer service and ecumenical encounter to commemorate the Reformation on the day of his arrival.
The pope's words go beyond those of Benedict XVI in his 2011 meeting with the Council of the Evangelical Churches in Erfurt, Germany.
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In a joint statement, the Roman Catholic Church and the Lutheran World Federation said that both partners "are no longer strangers" and that their joint goal was to bring members of the two churches together at the Eucharistic table.
Referred to as "The Church of the converts", the Swedish catholic church in recent years has seen a 3-4 percent annual increase in members, mainly triggered by immigration, church registrar Louis Michel told AFP.
In an interview published last week, the pope said he hadn't wanted a papal Mass to distract from the ecumenical significance of his visit, but finally agreed to the "fervent request" of the country's small Catholic community.
Lofven, a former union boss who leads Sweden's left-leaning Social Democratic Party, greeted the pontiff as he arrived at Malmo Airport in southern Sweden.
"We are praying that one day we may celebrate the holy communion together, this is very important for me", Younan said, while stressing the importance of accentuating common ground.
Monday's ceremony - held in Lund, site of the founding of the Lutheran World Federation - was neither a celebration of Luther nor a castigation of Catholicism; instead, it was a commitment to, as the pope said, "mend a critical moment of our history by moving beyond the controversies and disagreements that have often prevented us from understanding one another". "Rather, we have learned that what unites us is greater than what divides us". "The times called for a spirited defense of the faith".
Speaking in Spanish, the pope pointed to two positive consequences of the Reformation. Just as Jesus, the "true vine", is one with the Father, in order to bear fruit we must also be one with him, Francis said.
In his homily, Pope Francis insisted that Catholics and Lutherans must "look with love and honesty at our past, recognizing error and seeking forgiveness".
After the Reformation began five centuries ago, Sweden became such a grim place for Catholics that those who rejected the new Lutheran faith were punished with deportation or death.
The Pope traveled to Sweden to meet with the president of the Lutheran World Federation, Bishop Munib Younan.
Yet, he said, "Jesus never forgot us, even when we seemed to have forgotten him, losing ourselves in violent and hateful actions".
"The journey we have undertaken to attain unity is itself a great gift that god gives us", the Pope said. How rare to see an event whose objective was not political gain, but the quest of peace; Pope Francis's own Jesuit order was founded to defend the faith against what Catholics believed were Luther's "heretical" reforms. The Vatican estimates about 1.2 billion people have been baptized in the Catholic church.
During Francis' tenure as pope, he has continued to make headlines as a strong adherent of a Christian-unifying philosophy, pushing for openness and reforms within the church and making overtures to other non-Catholic denominations.