The German parliament has approved a resolution declaring that the mass killing of Armenians by Ottoman Turks during World War One was a "genocide".
Armenians say up to 1.5 million of their people died in the atrocities of 1915. Turkey says the toll was much lower and rejects the term "genocide".
The timing is awkward, as the EU needs Turkey to help stem the migrant influx.
Turkish president Recip Tayyip Erdogan said the resolution risked harming ties between the countries.
In the latest response:
- Turkey has withdrawn its ambassador to Germany "for consultations"; Mr Erdogan said he and the ambassador would "sit down together and discuss these issues, which have the potential to impact relations between Germany and Turkey," adding: "We will do whatever is necessary to resolve this issue"
- Turkey's Prime Minister Binali Yildirim blamed a "racist Armenian lobby" for the resolution
- Armenia's Foreign Minister Edward Nalbandian said it was a "valuable contribution" to the "international recognition and condemnation of the Armenian genocide"
- German Chancellor Angela Merkel said: "There is a lot that binds Germany to Turkey and even if we have a difference of opinion on an individual matter, the breadth of our links, our friendship, our strategic ties, is great"
More than 20 nations, including France and Russia, as well as Pope Francis, have recognised the 1915 killings as genocide.
Turkey denies that there was a systematic campaign to slaughter Christian Armenians as an ethnic group during WWI. It also points out that many Turkish civilians died in the turmoil during the collapse of the Ottoman Empire.
Ms Merkel was not in the Bundestag (lower house) for the vote. Her Christian Democrats (CDU), their coalition partners the Social Democrats (SPD) and the Greens all supported the resolution, and the vote in favour was overwhelming.
German MPs came under pressure from Turks in the run-up to the vote, including threatening and abusive e-mails, German ARD news reports.
The resolution uses the word "genocide" in the headline and text. It also says Germany - at the time an ally of the Ottomans - bears some guilt for doing nothing to stop the killings.
APUnder a deal struck in March, Turkey agreed to take back migrants - including Syrians - arriving on the Greek islands, in return for EU aid and a pledge to give Turks visa-free travel to most of Europe.
Germany accepted 1.1 million migrants last year - by far the highest influx in the EU.
German-Turkish relations were also strained this year by the case of comedian Jan Boehmermann, whose obscene poem about Mr Erdogan prompted a criminal complaint from the Turkish leader.
Last month a court in Hamburg ruled that Boehmermann's poem was satire, but banned him from repeating the sexual references in it, deeming them unacceptable.
Germany plans to repeal a clause in the constitution prohibiting insults that target foreign leaders - the clause invoked by Turkey in the complaint.
Armenian genocide dispute
AFP- Hundreds of thousands of Armenians died in 1915 at the hands of the Ottoman Turks, whose empire was disintegrating
- Many of the victims were civilians deported to barren desert regions where they died of starvation and thirst. Thousands also died in massacres
- Armenia says up to 1.5 million people were killed. Turkey says the number of deaths was much smaller
- Most non-Turkish scholars of the events regard them as genocide - as do more than 20 states including France, Germany and Russia, and some international bodies such as the European Parliament
- Turkey rejects the term "genocide", maintaining that many of the dead were killed in clashes during World War One, and that many ethnic Turks also suffered in the conflict