Alfonso Rodriguez Jr., 51, appeared in federal court and pleaded not guilty to a charge of kidnapping, resulting in death. If convicted, he could face the death penalty.
The complaint says the crime involved "torture and serious physical abuse," and that Rodriguez "held her for purposes of sexually assaulting her."
Federal prosecutors took the case to allow authorities to pursue the death penalty if Rodriguez is convicted. Neither North Dakota nor Minnesota, the two states involved in the case, have death penalty laws of their own.
Sjodin, 22, of Pequot Lakes, Minn., disappeared from a Grand Forks, N.D., shopping mall parking lot Nov. 22. Her body was found April 17, near a county road northwest of Crookston, Minn.
Rodriguez, of Crookston, had been in custody in Grand Forks on a state kidnapping charge since his arrest in December. That charge was dropped Wednesday at the request of federal prosecutors, Grand Forks County State's Attorney Peter Welte said.
Drew Wrigley, U.S. attorney for North Dakota, estimated that Rodriguez's trial would last three or four weeks. The trial was tentatively set for July 19, but officials said a decision first must be made about whether to seek the death penalty.
Wrigley said he will consult with his Minnesota counterpart and Sjodin's family before making a recommendation on the matter to Attorney General John Ashcroft.
Wrigley said the last case of capital punishment in North Dakota was about a century ago, and that the federal government has never sought the death penalty in North Dakota or Minnesota.
After his court appearance Wednesday, Rodriguez was jailed in Fargo. He waived a detention hearing, meaning he will remain in custody.
His attorney, Robert Hoy, could not immediately be reached for comment. Officials said Rodriguez would be assigned another attorney to help him prepare for the possibility that prosecutors will seek the death penalty.
Sjodin's parents, Allan Sjodin and Linda Walker, said in a statement they are confident "that there will be a full and complete airing of the facts surrounding the abduction and murder of Dru and that the correct verdict will be reached."
Federal charges had been expected because authorities believe Rodriguez crossed state lines while committing the crime.
Rodriguez was released from prison last May, after serving a 23-year sentence for attempted kidnapping, assault and other convictions for attempted rape and aggravated rape.
Investigators said they found traces of Sjodin's DNA in blood in Rodriguez's car, and that they found a knife in the trunk that matched a sheath found near Sjodin's car.