Recep Tayyip Erdogan said on Monday that Berlin had not responded to 4,500 dossiers sent by Ankara on terror suspects.
Speaking on A-Haber television, he said: "Mrs Merkel, why are you hiding terrorists in your country? Why are you not doing anything?
"Mrs Merkel, you are supporting terrorists."
Turkey has long accused Germany of harbouring Kurdish militants and suspects wanted over the failed coup on 15 July last year.
Steffen Seibert, a spokesman for Mrs Merkel, said the accusations were "clearly absurd".
He added: "The Chancellor has no intention of taking part in a game of provocation. These accusations are clearly absurd."
Mr Erdogan has criticised Mrs Merkel after she supported Dutch Prime Minister Mark Rutte following The Hague's refusal to let Turkish ministers hold rallies in the country ahead of a referendum on 16 April on expanding the Turkey President's powers.
On Monday, Ankara said the Dutch ambassador could not return to the country and added parliament would be advised to withdraw from the Dutch-Turkish friendship group.
German authorities last week also blocked rallies from taking place.