A police spokesman confirmed to German news agency DDP that about 60 far-right agitators - some of them hooded - took over the first two cars of a regional train headed to Hamburg from Pinneberg in the eastern German state of Schleswig-Holstein on Thursday morning.
The newspaper initially reported only 20 neo-Nazis had entered the train.
The neo-Nazis blocked other travelers from entering the train, according to DDP, saying "this is a members-only affair."
An emergency call from a witness reached police after the train had already arrived in Hamburg, the spokesman told DDP. Bild reported that police did nothing to stop the takeover.
The neo-Nazis shouted slogans including "after today foreigners and Germans will ride separately on Deutsche Bahn trains" and "foreigners ride in freight cars," according to press reports.