Her conservative CDU/CSU alliance is set to remain the largest party in the parliament, with 32.5% of the vote.
Its outgoing coalition partner, the social democratic SPD, says it will go into opposition after winning 20%.
The nationalist AfD is on track to become the third party, with 13.5%.
The performance, better than forecast in opinion polls, means the right-wing party will have seats in the Bundestag for the first time.
Dozens of protesters have gathered outside the party's headquarters in Berlin, some with placards saying "Refugees are welcome".
Addressing supporters, Mrs Merkel, who has been in the job for 12 years, said she had hoped for a "better result".
She added that she would listen to the "concerns, worries and anxieties" of voters of the anti-immigration, anti-Islam Alternative for Germany (AfD) in order to win them back.
Mrs Merkel also said her government would have to deal with economic and security issues as well as addressing the root causes of migration - one of the main reasons behind AfD's result.
"Today we can say that we now have a mandate to assume responsibility and we're going to assume this responsibility calmly, talking with our partners of course."
Source: BBC
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