German Chancellor Angela Merkel took responsibility for her party's election defeat in a German state where she has her political base, but strongly defended her migrant policy on Monday even as she vowed to win back voters' trust.

A year before an expected national election, a nationalist, anti-immigration party's second-place finish on Sunday ahead of Merkel's conservatives was a jolt that will likely increase tensions in Germany's governing coalition. However, the result didn't pose any immediate threat to Merkel, 62, Germany's leader since 2005.

Merkel's Christian Democratic Union finished third in the election for Mecklenburg-Western Pomerania's state legislature, behind the three-year-old Alternative for Germany, or AfD. It was held exactly a year after she decided to let in migrants stuck in Hungary, triggering the peak of last year's influx.

The region is sparsely populated, but the vote was symbolically significant because Merkel's parliamentary constituency is there. It was the first of five regional ballots before a national election a year away. The next is Sept 18 in Berlin, where local issues are likely to feature more strongly.

Mecklenburg is home to few foreigners, but Merkel acknowledged that migrant policy was a dominant theme.

"We must all consider how we can now win back trust, me first and foremost," Merkel said.

"I am the party leader, I am the chancellor - you can't separate those in people's eyes, so I am of course responsible too" for the result, Merkel said.

"However, I believe the decisions that have been made were right, and now we must continue working."