The area has been cordoned off and a suspect arrested.
Police initially raided the house on the island of Gotland on Wednesday. The occupant was held on suspicion of drugs crimes.
While inside, police suspected that there were explosive goods somewhere in the the house.
Yesterday police found explosive material but did not provide any further details.
This afternoon a further search was carried out. Police sealed off a larger area around the house, evacuating people from surrounding buildings.
A total of ten houses have been emptied of their inhabitants. It is not known when people can begin returning to their homes.
The suspect was remanded in custody at Gotland district court today, suspected of planning to cause damage to public property, threatening an official, and drugs crime.
The man is already known to police.