Niklas Gudmundsson came to Norwich on trial during the 1994-95 season and played for the Reserves in a 1-1 draw with Ipswich. Norwich did not pursue the signing of the then-Halmstad striker any further. He joined Blackburn Rovers the following season and played in the Premiership for them (6 appearances). He spent a considerable part of the 1996-97 season back in East Anglia on loan to Ipswich for whom he made 7 appearances. Blackburn sold him to Malmo for £300,000 in the summer of 1997.

Prior to his Norwich trial, he had played for Tronnige IF before joining Halmstad in 1986. He won the Swedish Cup with Halmstad in 1994/95.

In December 1999, it was reported that newly promoted Norwegian First Division side Byrne FK had inquired after his services.

In 2001 he moved to IF Elfsborg where he won the Swedish Cup in 2000/01. In 2003 he moved on to Angelholms FF where he remained until 2007.

He won seven caps for Sweden, the first in 1991 in a friendly against Poland. He also played in three of Sweden's four games at the 1992 Olympics and in the 1992 UEFA European Under-21 Championships.

His son Gabriel later played for Halmstads, Dutch side Groningen and French side Lille and was capped by Sweden.