The man was gunned down on Tuesday evening in the Sollentuna suburb. Witnesses described how a luxury Mercedes car pulled up alongside another car and the driver fired several shots from close range.
"It was a pure execution," a local resident who witnessed the murder told the Aftonbladet newspaper. The witness said that between seven and eight shots were fired in the attack.
Police and emergency services arrived quickly on the scene and found the 32-year-old man slumped in his car. He later died of his injuries.
The authorities believe the killing may be connected with two other recent murders carried out in Stockholm. Newspaper Aftonbladet reported that the victim's name has cropped up in several police investigations over the course of the past year.
Police have opened a murder inquiry and have questioned four people in connection with the incident. Two of those were still being questioned into the early hours of Wednesday morning but were subsequently released.
"It is two people who were brought in for questioning after being stopped near the site. That does not mean they are suspects," Lars Byström, Stockholm police's press spokesperson, told the TT news agency.
Several witnesses have also come forward and the attack has been classified as murder by police.
Police have yet to arrest a suspect but have managed to recover the vehicle believed to have been used in the shooting.
"The car has been impounded and will now be examined by a technician," Byström added.