Rescuers were able to save just five of the camel herd from the inferno as it decimated their sleeping quarters overnight at the farm in the state's Calw county.
Some 150 fire-fighters from the nearby communities of Calw, Nagold, Altensteig und Ebhausen were called out to battle the blaze, which broke out at 2:13 am. An ambulance was also called to the scene, but was not needed as no humans were harmed in the fire.
The cause of the fire remained unclear, said police on Thursday morning, but the investigation begun overnight had not ruled out arson as a possible cause. Witnesses are now being sought who may be able to shed light on the case.
"We are investigating all possibilities," said a police spokesman.
Police said the fire had caused an estimated €1 million of damage to the farm, which since opening in May 2002 had become a favourite destination for school trips, youth groups and families.
Owner of the family-run business Wilhelm Breitling posted a simple notice on the farm's website announcing the sad news. "Last night the camel farm burned down. Most of the animals were killed," it reads.
Breitling said he first came into contact with camels during a trip to North Africa in 1975. He bought his first camels in 1987 and brought them back to Germany. He had been planning to retire in the near future and had been seeking a buyer for his business, according to press reports.
Messages of shock and sympathy were already flooding the camel farm's Facebook page on Thursday.
"We can only guess how you must be feeling. You clearly lived for those animals," wrote Facebook user Corinna Binder.