The winning pair of Evi Sachenbacher-Stehle and Claudia Nystad came home first in a time of 18minutes and 3.7seconds with Sweden at 0.6 seconds back and the Russians at 4.0 seconds off the pace.
"It was a great race, Evi and I worked very well together," Nystad said after skiing an excellent final leg. "We did everything right and at the right time."
Nystad said she gave her all to win gold for Germany.
"I decided to just try everything, give it all I've got. I had no feelings, just a plan," she said.
The race came down to a tight final leg with Nystad attacking hard after Anna Haag seemed to have a decisive lead.
"We really went for gold, but we have to be satisfied with silver," said Haag. "At the beginning of the final straight, I thought 'maybe I can take it', but there wasn't enough distance left. She was too strong, Claudia is one of the best sprinters in the sport."
The German bided her time and then attacked coming into the stadium to earn her country's sixth gold medal of the Vancouver 2010 games.
The Swedish team led after the first exchange and Charlotte Kalla, who won individual gold in the 10km, set a fast pace with Sachenbacher-Stehle pushing her all the way into the changeover.
Haag then kept Sweden in front with Nystad second on the second leg and although Germany stole the lead briefly after the next exchange, Kalla made sure Sweden’s white suits were in front.
Haag seemed to have the race under control by the last exchange, but Sachenbacher-Stehle hung in and when she made her final move, her Swedish rival could not respond.
But having claimed her second medal of the Games, Kalla said the Swedish pair could afford to party.
"We have a rest day tomorrow, so we can have a small celebration, then we will be preparing for Thursday's relay," she said.
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