Horst Seehofer leads the Christian Social Union, the sister to Merkel's conservative Christian Democratic Union, and is also her interior minister.
Before the Bavarian vote, Merkel urged her CDU and CSU allies to end their infighting.
Although German states have fewer powers than those in the United States, state elections are extremely important. "We can expect this to have an impact on national politics".
The Bavarian election is followed in two weeks by another test for Merkel's conservative alliance: her CDU is likely to remain the largest party but lose votes in an election in the western state of Hesse, home to the financial centre of Frankfurt.
Chancellor Angela Merkel's Bavarian allies suffered their worst election result since 1950 on Sunday, bleeding votes to the far-right in a setback that immediately raised tensions within Germany's crisis-prone national government. This year, it has been a nightmare coalition partner.
Leader of the CSU, Markus Soeder said they accepted the result with "humility" and the SPD responded by saying "something has to change".
Both other parties in the nationwide coalition hated this tactic but could do little as Seehofer paralyzed the government.
Merkel's own fortunes were not tied to the result in Bavaria, where her party wasn't on the ballot.
The turnout was significantly higher than in the last Bavarian election in 2013.
The election proved that Seehofer's tactics had been a big mistake. Trailing behind was the AfD with 10.7% and the Social Democrats with 9.5%. That would see the CSU partner with the Free Voters, a local conservative rival that made modest gains to win 11.6 percent.
"The political quake was in Bavaria, but the aftershocks will be felt in Berlin". "You don't fight populism with populism".
"This created a political climate of polarisation from which the Greens and the AfD benefited the most, with their clear stances on immigration", Weigl said.
The Greens are now the second-strongest party in Bavaria with 17.5 percent support; they won the election in Munich, the state capital, and they're the political force with which the CSU, victor of 37.2 percent of the vote, could build the most popular two-party ruling coalition, though it prefers the Free Voters as a partner. One thing is for sure: "Despite certain debates and comments and forecasts, the CSU is not only the strongest party, it has remit to form government, and that has to be said as well in this context".
Asked if he would resign as CSU leader, Seehofer told ZDF broadcaster that he was not ruling it out but there were many reasons for the party's weak result which now had to be analysed prudently.
Merkel's strategy of holding onto the center rather than appeasing the nationalist fringe is suddenly looking smarter. "If it maintains its role as chancellor... then this is the beginning of the end". Populist anti-migrant parties across the region have splintered traditional support bases on the left and right, leading to fractured election outcomes and more coalition governments. They appear poised to do so, perhaps even allowing the CDU to keep governing the state with them rather than build a new coalition.
That shift means Merkel's ability to maintain a ruling coalition for long is in doubt. His party got 37 per cent.
"This is also true of the Union parties (CDU and CSU), which are expected to work together", she added.