Moderna Museet (the Museum of Modern Art) on Skeppsholmen island holds one of Europe's strongest collections of 20th- and 21st-century art. The permanent collection includes key works by Picasso, Dalí, Matisse, Duchamp, and Andy Warhol, alongside major Scandinavian artists. The building itself — designed by Rafael Moneo — is low-slung and handsome, sitting comfortably on the island with good views of the waterfront.
The museum is free on certain evenings, and the restaurant has a terrace with a nice view of the water towards Gamla Stan. Skeppsholmen is a quiet island that rewards a slow walk even if you don't go in — the Arkitekturmuseet (Architecture Museum) is next door and shares the same location.