It was the first time the Los Angeles center, named for the famous Nazi hunter of the same name, gave its top grade to any country besides the United States.
Germany's prosecution policy has changed to permit more suspects -- especially low-ranking Nazis and those not of German origin -- to be brought to justice, the center said.
The change is "very significant" and "is likely to yield important results," Efraim Zuroff, director of the center's Jerusalem branch, told German broadcaster Deutsche Welle.
Germany's investigations into Nazi war crimes rose to 177 in 2009-2010 from 27 in 2008-2009, the center said.
But Germany is not the only country where investigations into Nazi war criminals are on the rise, the center said. It is a worldwide phenomenon.
At least 852 investigations were conducted around the world from April 2009 to March 2010, up from 706 during the same 2008-2009 period, the center said.
"There's obviously a sense of growing urgency, because this is a time-limited initiative, which will not continue forever," Zuroff told Deutsche Welle. "That's one element. The other element is the increased knowledge and sensitivity toward Holocaust crimes."