The Education First (EF) English Proficiency Index (EPI) ranked Sweden in third position with a proficiency score of 67.8.
Scandinavian cousins Denmark topped the list with 69.3 followed by the Netherlands on 68.9.
The news is a blow for the Swedes, who topped the charts in 2012 and 2013.
Ten English words you didn't know came from Swedish.
The latest study stated that Swedish women trumped their male counterparts when it came to speaking English.
"Swedish women speak better English than Swedish men, with a more pronounced difference in skill levels between the genders than in the other Scandinavian countries
"There is less variation in English proficiency between different age cohorts in Sweden than any country in the world except Taiwan, showing that in Sweden, adults of all ages master the English language to a high level," the report concluded.
The study also suggested that there are strong correlations between English proficiency and income, quality of life, ease of doing business, Internet usage, and years of schooling. These correlations are remarkably stable over time, stated EF in its findings. EF is the world's largest educational company, specializing in language learning, academic programs and cultural exchange. The company was founded in 1965 and today operates 500 schools and offices across 52 countries.