The newspaper Dagens Nyheter, which broke the news, says Swedish police hold 4,029 names of Roma people living across the country.
According to the newspaper, the database is a family tree with information about social security numbers and addresses and arrows which show the family bonds between those registered.
"It makes me feel uncomfortable and frightened. Does it have to be the way it was in Germany when the aim was to exterminate Romas and Jews?" Erland Kaldaras, spokesperson for the Roma Youth Association, was quoted as saying by the SVT television station.
Many of the people in the database have not committed crime and thousands of them are children.
"It becomes even more scary when you see that this is also about small children who can't even walk or talk," Kaldaras said, adding that the next step would be to determine how far up within the police, officers knew about the database.
According to the police, the database was set up in 2009 because of a special investigation on criminal activity and was used in southern Sweden during 2011. Since then, the police have added people with "links to criminals" who were suspected of carrying out illegal activities.
Ethnic registration is illegal in Sweden and the registry also violates the European convention on Human rights, which provides the right to respect for private and family life.
Breaching several laws
Lawyers, who Dagens Nyheter spoke to, added that the database was in breach of several Swedish laws.
"Is 'itinerant' a new way of saying Roma and if so a registration because of ethnical origin? It's illegal to register solemnly on that background," said Johan Hirschfeldt, an expert on the Swedish constitution.
Lars Försell, information director at the police in the southern region of Skåne in Sweden, said the database was "completely" against Swedish law. "Our thoughts right now is that it must be an individual who has added the details and it has been a big job so we are quite surprised right now," he said.
Dagens Nyheter claims it possesses a database created at the end of May 2012 that is still being used for police work today.
"Why are the police registering Romas? It's racist. It's discomforting that my children are part of this," said Sandra Håkansson, whose entire family is listed in the registry.