The Swedish compulsory school system has shifted from one of the most publicly dominated and centralized school systems in Europe, into one of the most decentralized. This process has resulted in a system that is more focused on competition. The question about free choice and how it influences residential and social segregation is widely debated on all levels in Swedish society. The government states that no school should be socially or economically segregated and that it’s important that pupils in schools have different experiences, social backgrounds and gets in contact with different cultures. The main focus in this paper investigates how the free choice in the compulsory school interacts with and is related to integration and segregation processes in the urban environment. The paper is divided into three parts and starts with a historical background to the development of the Swedish school system. Part two discuss the free choice policy reform that was implemented in the mid 1990s and part three highlight current segregation trends in the Swedish school system of today.