The money had been taken by a 66-year-old man who had been in charge of the bookkeeping at the Carl Larsson museum for many years.
"It was all our money. We didn't have anything left," Museum Director Chia Jansson told Radio Sweden.
The museum has had to take a major bank loan to cover the losses, and has appealed to the public for donations. So far, it has raised around SEK 150,000.
The 66-year-old was convicted earlier this month for having embezzled the money from the museum as well as from other businesses in the village of Sundborn in Dalarna, where the former home of Carl Larsson is located. He has now appealed to have his sentence reduced.