More than two thirds of the heat supply to the Swedish district heating systems is nowadays based on biomass and waste resources. These district heating systems provide heat to cover more than half of the heat demands in the Swedish building stock. This paper reveals the development from the original use of fossil fuels in the late 1970s, the introduction of biomass as fuel in the early 1980s, the transition to considerable more renewables during the 1990s, and to the current situation when biomass dominates the heat supply. Our four conclusions consider the established infrastructure in both forestry and district heating, driving forces from energy policy tools and local initiatives, the contradiction between primary energy use of biomass and traditional heat recovery, and finally the future challenge of competitive use of biomass.