"We are all forever called upon, to never close our eyes and ears to those who today accost, threaten and attack people when they identify themselves somehow as Jews or also when they side with the state of Israel," Merkel told a solemn ceremony.
After laying a wreath with a former French deportee, Merkel thanked ageing survivors of the death camp who had travelled to Dachau, northwest of Munich, for sharing their life stories, saying she was "greatly moved" so many had made the journey.
American forces liberated the Dachau camp on April 29, 1945 and discovered on arrival the unspeakable horror that had led to the death of around 43,000 people from starvation or disease.
Similar 70th anniversary commemorations have taken place at other former camps this year, beginning in January with Auschwitz in what was Nazi-occupied Poland, but Dachau is the only one Merkel has attended.
In pouring rain, the silence interrupted only by the tolling of the chapel bells, more than 130 survivors, some in wheelchairs, as well as former US veterans and political figures, also took part.
The troops "didn't believe their eyes on seeing the heaps of bodies" on their arrival at the camp, he said, adding: "I was 21 years old, the war had stolen my youth."
Merkel joined another French former deportee Clement Quentin to place a wreath of flowers in front of the former camp crematorium.
He told AFP in an interview recently that when the liberation of Dachau came, he was simply "waiting to die".
He also described being subjected to SS medical experiments during his 10 months at Dachau, with the camp's doctors infecting him with tuberculosis.