“Maybe next time the German NATIONAL TEAM should play again,” the party's deputy leader Beatrix von Storch tweeted after Germany's 2-0 defeat in Marseille.
The remark was widely seen as a jibe at players with immigrant roots and caused a storm of protest on Twitter.
“Pure stupidity,” Ralf Stegner, a leading member of the Social Democrats, junior partners in Chancellor Angela Merkel's left-right government, tweeted back at von Storch.
“Sore loser,” said Armin Laschet of Merkel's CDU party.
“Who is this pathetic person who can't be happy that we're the world champions?” Omid Nouripour of the opposition Greens party said, referring to Germany's 2014 World Cup victory in Brazil.
And popular television comic Jan Böhmermann pleaded: “Let's just stick together and ignore Beatrix von Storch.”
Lasst uns alle zusammenhalten und Beatrix von Storch einfach mal ignorieren.
— Jan Böhmermann (@janboehm) July 7, 2016
Von Storch later deleted the offending tweet and took to Facebook to say that it had been a misunderstanding and she was referring to the team's nickname, Die Mannschaft (the team), not individual players.
“I will keep calling them the Nationalmannschaft (national team) because that's what it is, with all its players,” she wrote.
It was not the first time the Alternative for Germany party were seen as taking aim at non-white players.
In May, another AfD deputy leader, Alexander Gauland, attacked team star Jerome Boateng: “People find him good as a footballer, but they don't want to have a Boateng as a neighbour.”
Gauland faced widespread condemnation for his remarks but Boateng, who was born in Berlin to a German mother and a Ghanaian father, brushed them off.
“I can only smile about it. In all honesty, it's sad that something like that is said these days,” he said.
Von Storch had shocked the country earlier this year by suggesting German police may have to shoot at migrants, including children, to stop them entering the country.