Ola Sjökvist received enough local election nominations to snag one of four Sweden Democrat seats in Avesta.
But he's been criticized after a picture he posted on Facebook in 2010 caught the attention of the Avesta Tidning newspaper on Friday.
It appears to show Sjökvist taking a photo of himself in a mirror while performing a "Heil" gesture with what appears to be a Hitler-style moustache on his upper lip.
His hair is combed to the side and he is wearing a brown shirt.
"It was nothing more than a fancy-dress party of a friend of mine," he explained, when confronted by the paper.
"It was really just a bit of fun. We had to dress as someone well known – and if there's someone who's well-known it's him. Everyone recognizes him," he added.
The costume marks the second time this month that someone with Sweden Democrat connections has landed in hot water due to Nazi-related accessories. A 20-year-old woman stepped down after she was snapped wearing a Nazi armband.
In March last year, another Swede who dressed as a Nazi for a party was acquitted of hate crime charges.