German Chancellor Angela Merkel's ruling party has been beaten into third place by an anti-immigrant and anti-Islam party in a state election, TV exit polls showed.
The chancellor's CDU party was supported by only 19.8 percent of those who voted, according to the exit polls, in a stinging defeat in Ms Merkel's home district.
The Alternative fuer Deutschland (AfD) party took 21.4 percent of the vote behind the centre-left SPD's 30.2 percent.
The AfD's strong showing could weaken Mrs Merkel ahead of German parliamentary elections next year.
Before the vote in Mecklenburg-West Pomerania, all of Germany's other parties ruled out forming a governing coalition with the AfD.
Mrs Merkel's approval rating has plunged to a five-year low of 45 percent, down from 67 percent a year ago, due to spreading disenchantment with her open-door policies on refugees.
Under her leadership, Germany has been taking in large numbers of refugees and migrants - 1.1 million last year.
The AfD, initially an anti-euro party, has enjoyed a rapid rise as the party of choice for voters dismayed by Mrs Merkel's policy.
But its political power is limited and critics accuse it of engaging in xenophobic scaremongering.
The CDU has been the junior coalition partner in Mecklenburg-West Pomerania since 2006 and is likely to remain in the governing coalition. However, its 19 percent in the election is its worst ever result in the state, German broadcasters said.
BBC Berlin correspondent Damien McGuinness says that following her political embarrassment, Mrs Merkel will now come under greater pressure to change her welcoming position on refugees.
Addressing supporters, local AfD leader Leif-Erik Holm said: "Perhaps this is the beginning of the end of Angela Merkel's chancellorship today."
Mrs Merkel, who is in China for the G20 summit, told Bild newspaper on Saturday: "We did not reduce benefits for anyone in Germany as a result of the aid for refugees. In fact, we actually saw social improvements in some areas.
"We took nothing away from people here. We are still achieving our big goal of maintaining and improving the quality of life in Germany."