The election could see incumbent Angela Merkel from the Christian Democratic Union win a fourth term in office -- or be ousted by her main rival Martin Schulz, of the Social Democratic Party.
Polling stations are open until 6 p. local time (12 p. ET); the country`s two state broadcasters are expected to release an exit poll shortly after voting ends.
It is unlikely that one of the parties will win more than 50% of the 598 seats in parliament, meaning the largest party would start coalition talks on Monday.
Who could be Chancellor?
Whoever wins has a daunting task ahead. Over the next four years, Germany will play a key role in overseeing -- and negotiating -- Britain`s departure from the European Union and in dealing with the global threats of terrorism, climate change and an emboldened North Korea.
The Chancellor will also have to tackle domestic concerns over immigration, education and investment in digital technologies.
Merkel has pledged to reduce Germany`s already low unemployment, and is offering modest tax cuts. She has defended her 2015 "open door" policy that led to more than a million refugees entering the country, but has insisted the events of that year must not be repeated.
But the Chancellor has largely stayed away from making big election promises and has been accused of "sleepwalking" through the campaign by the German media.
Schulz has been far more combative, promising to raise taxes on the rich, tackle poverty among workers and pensioners in Germany, and invest in infrastructure and education.
He has also taken a harder line than his rival on the recent actions of Turkish President Recep Tayyip Erdogan and US President Donald Trump, who he accused of bringing "us to the brink of a crisis" with his "fire and fury" tweet.
Who gets a say?
There are 61.5 million eligible voters in Germany and 42 parties contesting the election. But only six of those parties are likely to win enough votes to send representatives to the Bundestag.
Those are Merkel`s conservatives (the CDU), the social democrats, the liberals (FDP), the Left party, the Greens and the far-right Alternative for Germany (AfD) -- which was founded in 2013 and looks set to enter parliament for the first time.
The CDU and SPD -- partners in a coalition government since the last election in 2013 -- are likely to emerge as the two largest parties. But the battle for third place among the smaller parties has been fierce.
Around 650,000 volunteers have been deployed at 73,500 polling stations across the country to make sure the process runs smoothly.
What happens next?
Once the final results have been announced on Monday, coalition talks will begin.
To form a government, the parties involved must have a combined total of at least 50% of the seats in parliament.
There are likely to be several coalition options -- and plenty of disagreement between the parties before they reach a deal.
Parliament will reconvene on October 24 with the new government in place.
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