Merkel is running for a fourth term in September national elections, with many Germans wary of military deployments given the country's militaristic and nationalistic past.
Speaking at a joint news conference with NATO Secretary General Jens Stoltenberg, Merkel said she would wait to see the outcome of NATO's assessment of a request from the alliance's military authorities to send more troops to Afghanistan.
But the centre-right leader signalled Berlin was not ready to take on more responsibilities there.
"I don't think we're first in line to expand our capacities there. It's more important to ensure that ... stability is guaranteed in the north," Merkel said.
Stoltenberg said a decision on NATO's presence in Afghanistan was due "within weeks".
He emphasised that the alliance was not discussing any return to combat missions in Afghanistan, and would continue to focus on "train, assist and advise" missions.
He also acknowledged the role Germany was playing as lead nation in Afghanistan's north.
"If there is any increase, which is not yet decided, then we will go out and ask all allies and partners," he said.
"I want to state very clearly, that even if such a decision is made, it will not mean that any military activity that Germany currently carries out, for instance, AWACS surveillance, will be expanded or something like that," Merkel told reporters.
Stoltenberg also addressed a long-standing conflict between Germany and the United States over defence spending. He noted that NATO members had not agreed in 2014 to spend two per cent of their gross domestic product on defence "tomorrow," but to halt a fall in military spending and move toward the 2 percent target.
"What we promised was to stop the cuts, gradually increase and then move towards two per cent," Stoltenberg said. "And actually Germany and many of the European allies have started to do exactly that."
U.S. President Donald Trump has criticised Germany for not spending more on its own defence, and the issue could figure prominently at the upcoming summit of NATO leaders on May 25.
Merkel said Germany was steadily increasing its military spending, and that she did not see the need for any further specific measures at this point.
(Reporting by Andrea Shalal; Editing by Michael Nienaber and Richard Lough)