The pair, both in their twenties, live very close to each other but in separate apartments, according to local newspaper Östra Småland.
The prosecutor has a witness to back up the case, according to charges presented at Kalmar District Court. Three police officers called to the scene have also agreed to testify.
Neither party is believed to have been subjected to coercion or violence, but as sex between siblings is illegal both could face time in jail.
Cases of sibling incest in which both sides are suspecting of committing a crime are extremely rare in Sweden.
“The main reason this isn’t discussed is because it’s so rare, at least officially. But there are probably a considerable number of hidden cases,” top local lawyer Karl-Olof Wirell told Östra Småland.