"We all saw the unsettling pictures of the storming of the US Congress yesterday evening, and these images made me angry and sad," Merkel told a meeting of conservatives.
Merkel said the president himself had to accept part responsibility for failing to concede.
"A ground rule of democracy is that after elections there are winners and losers. Both have their role to play with decency and responsibility so that democracy itself remains the winner."
"I regret very much that President Trump has not acknowledged his defeat since November and also again not yesterday. Doubts about the election outcome were stirred and created the atmosphere that made the events of last night possible."
Merkel had shown her skepticism toward Donald Trump from the beginning. As recently as last summer, she refused to travel to Florida for a G7 meeting. The coronavirus epidemic served as her explanation. But her cancellation was widely seen as a repudiation of Trump and his policies.
Relations between Germany and the United States became strained over the four years of Donald Trump's presidency.
Trump repeatedly criticized Germany over its defense spending, complaining that Berlin has failed to meet the NATO spending target of 2% of economic output.
Merkel and other German leaders are hoping for better communication channels and increased cooperation with Washington under Biden.