The German parliament has approved a resolution declaring that the mass killing of Armenians by Ottoman Turks during World War One was a "genocide".
Armenians say up to 1.5 million of their people died in the atrocities of 1915. Turkey says the toll was much lower and rejects the term "genocide".
The vote heightened German-Turkish tensions at a time when Turkey's help is needed to stem the flow of migrants.
Turkey has recalled its ambassador and its leader threatened further action.
President Recep Tayyip Erdogan said the recall was a first step and that the government would consider further action it might take in response to the vote.
"We will do whatever is necessary to resolve this issue," he said.
In the latest response:
More than 20 nations, including France and Russia, as well as Pope Francis, have recognised the 1915 killings as genocide.
Turkey denies that there was a systematic campaign to slaughter Armenians as an ethnic group during World War One. It also points out that many Turkish civilians died in the turmoil during the collapse of the Ottoman Empire.
Mrs Merkel was not in the Bundestag (lower house) for the vote. Her Christian Democrats (CDU), their coalition partners the Social Democrats (SPD) and the Greens all supported the resolution, and the vote in favour was overwhelming.
German MPs came under pressure from Turks in the run-up to the vote, receiving threatening and abusive e-mails, German ARD news reports.
The resolution uses the word "genocide" in the headline and text. It also says Germany - at the time an ally of the Ottomans - bears some guilt for doing nothing to stop the killings.