Speaking for over an hour, Mona Sahlin called for a united front in the fight for collective bargaining agreements and the union movement.
"Today the whole worker movement is facing an attack from the right, the strongest in a very long time," she said, pointing to the Moderate-led government's changes to the unemployment benefits system.
"It's happening quickly, it's sloppy and they're not listening to the unions and to people's concerns," said Sahlin.
"Now we'll take up the fight and we'll do it together, the party and LO," she added, referring to Sweden's umbrella union organisation.
Sahlin also said that she would create a working group to develop the party's foreign and EU policies before the European election in 2009 and the next Swedish election in 2010. EU commissioner Margot Wallström and former foreign minister Jan Eliasson would be on the committee.
"Margot Wallström, welcome back!" said Sahlin of the woman many would have liked to see take over the leadership of the Social Democrats after Göran Persson's departure.
Sahlin spoke of the party's election defeat in September 2006 and urged her fellow Social Democrats to consider "with humility and self-criticism" why Swedish voters turned away from the party.
She went on to promise a renewal of the party's organisation and leadership:
"We will listen. We will find new ways to communicate," she told the audience.
Then Sahlin dealt with the areas of politics which she sees as being most important for the party's future. She referred to a speech by Olof Palme in 1984, where he identified jobs, the environment and peace. To those she added welfare.
Mona Sahlin said that she would take on her predecessor's committment to break Sweden's dependence on fossil fuels by 2020. She wanted to continue to develop green technology and alternative energy sources.
"We should be able to love the car but hate the petrol," she said.
In response to the speech, the chairman of the Social Democrat Women's Group, Nalin Pekgul , wept openly.
"That's the most fantastic speech I've ever heard," she said.
Not everybody was so moved, but it was hard to find a negative voice in the congress hall.
The Social Democrats' economic spokesman Pär Nuder was pleased that Sahlin had mentioned the plight of young people in Sweden. He added that he did not think his role would change under Sahlin.
"It will be the same as before. The economic policy is fixed," he said.
Laila Naraghi, who is running to be the new chairman of the young Social Democrats, SSU, was delighted that Sahlin promised to support them.
"That's welcome," said Naraghi, who described Sahlin's speech as "engaging and inspiring".