Twenty-nine German police officers have been suspended for sharing photos of Adolf Hitler and depictions of refugees in gas chambers on their phones.
The officers also used far-right chat rooms where swastikas and other Nazi symbols were shared, officials from North Rhine-Westphalia (NRW) said.
NRW Home Secretary Herbert Reul said it was a “disgrace for the NRW police”.
It follows several other incidents of far-right extremism among the German security services.
More than 200 police officers participated in raids on 34 police stations and private homes linked to 11 main suspects. The officers are said to have shared more than 100 neo-Nazi images in WhatsApp groups.
Some of the suspects face charges of spreading Nazi propaganda and hate speech. Others are accused of failing to report the actions of their colleagues.
“It’s the worst and most disgusting type of hate bait,” Reul said, adding that he expected the investigation to find more threads with offensive content.
“I am appalled and ashamed,” said Frank Richter, the police chief for the city of Essen, where most of the suspects were located. “It’s hard to find words. “
Mr Reul has now opened an investigation into the extent of extremism within the state police.
“Right-wing extremists and neo-Nazis have absolutely no place in the North Rhine-Westphalian police force, our police,” he said, and the authorities had to show a “clear political profile” that rejected the extreme right.
German police and security services have been accused of not doing enough to root extremists out of their ranks.
In July, prosecutors said they arrested a former police officer and his wife on suspicion of sending threats to well-known immigration figures, including several Turkish-born lawmakers.
The emails were signed “NSU 2.0”, a reference to the neo-Nazi gang “National Socialist Underground”, which committed 10 racist murders between 2000 and 2007.
The scandal has already seen Hessian state police chief Udo Münch resign after it emerged police computers had been used to uncover details of a leftist politician who later had received one of the threatening emails.
Meanwhile, in June, the German defense minister ordered the partial disbandment of the elite KSK commando after growing criticism of right-wing extremism within its ranks.