The student, whose name was not disclosed, was fined 2,400 kronor for reading two stories to a group of 15 six year olds.
The children were filmed during the readings to study their facial expressions.
The two stories concerned homosexual sex acts between eight year old boys and girls.
The reading, held last January, was part of a project by the Stockholm drama school Dramatiska Institutet (DI) to study children and their sexual awareness and understanding about love and their own bodies.
The stories were written by the student on behalf of his drama group.
The man denied any wrongdoing and pleaded innocent. He argued that his drama group trusted their teachers who had assigned the project and who had encouraged them to speak openly with the children about sex.
The teachers had however not seen the text before it was read to the children.
The Stockholm district court found that the text was “hardcore pornography”, and said the video footage showed that some of the children had reacted strongly and negatively to the reading.
It added that “reading pornography to children should, in line with current mores in society, be considered unsuitable and indecent.”
The head of DI, Per Lysander, said he disapproved of the text but said that the college, as well as the student, bore some responsibility for what had happened.
He told TT that the incident had exposed failings at the college.
“We fell short in the way we handled this group of children. They did not get the support they had a right to as students at Dramatiska Institutet,” he said.
But at the same time, he criticised the court for focusing purely on the content of the stories.
“I would have liked to have seen a broader discussion of the project. That did not happen, so the student was forced to bear all the responsibility,” said Lysander, adding that the judgement would be debated within the Swedish theatre world.
Lena Lennerhed, the chairman of the Swedish Organisation for Sexual Education, said that the incident should never have been dealt with in court.
“I’m not saying that it was OK to read this story. He shouldn’t have done that, but I think that the issue has been blown completely out of proportion,” she said.
There is a risk that the adult world backs away from discussing sexuality with children, Lennerhed added.