Successive shutout wins over Slovenia and Italy had put Sweden back on track after an inconsistent start in Group B, but a slip-up against their neighbours would see Norway take fourth place from them with just one match to play.
After 20 minutes, that's exactly what was on the cards - Rasmus Asplund was called for tripping after eight minutes, and though the opportunity for a shorthanded goal came and went when Lucas Raymond had a penalty saved 10 seconds later, Norway made the most of the powerplay.
Eskild Bakke Olsen was afforded time and space behind the Swedish net to set the puck back for Noah Steen to strike the underdogs in front.
Norwegian resistance lasted until the end of the first period, but the tide appeared to be turning with just under two minutes played in the second, when Mikkel Eriksen was called for boarding. On the powerplay, Sweden worked the puck around the Norway zone before a ricochet off Jack Berglund saw the puck sit up kindly for Ivar Stenberg to finish despite the tight angle.
Further penalties looked to be Norway's undoing, but after Martin Ronnild was called for delay of game, the Swedes cancelled out their powerplay when Simon Holmstrom was called for slashing. And was Max Krogdahl was called for high sticking, The Polar Bears not only held out in defence but retook the lead.
In the final 30 seconds of the Swedish advantage, Havard Salsten knocked the puck clear to Steen on his own blue line, who skated into the attacking zone, cut inside to evade the defender and fired his second of the game past Arvid Soderblom.
Tre Kronor's response was hampered by a tripping call against Jakob Silfverberg, while a video review confirmed that Jacob de la Rose hadn't found an equaliser amid a scramble in front of the Norwegian net, as the underdogs reached the 40-minute mark in front.
Sam Hallam's side had 20 minutes to save themselves, and were back level again with just over three minutes played in the third, as Norway looked to have survived a period of pressure right in front of their goal, only for Raymond to pick up the loose puck on the left and rifle it into the top corner.
Things looked to be going Sweden's way after Steen was called for slashing, but they couldn't profit on the powerplay, and when Stian Solberg gave them another chance after a delay of game call with 11 minutes to play, Norway stunned the 11-time world champions once again.
The Swedes began to build another wave of attack, only for Ronnild to intercept a pass at centre ice, and the loose puck was collected by Eirik Salsten, who raced clear and planted Norway's second shorthander into the net.
Sweden pulled the goaltender in the final minutes, and came agonisingly close to a third equaliser in the dying seconds, but Norway held on for a famous 3-2 victory.
That takes Norway above Sweden into fourth on 10 points, one fewer than Slovakia and one more than the Swedes. The three will fight for the final place in the Quarter-finals - Norway face Czech Republic on 25th May and Denmark on the 26th. Sweden's only remaining game is against Slovakia on the 26th, by which time they could already be eliminated if Slovakia beat Canada and Norway pick up points.
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