Immediately after winning a close vote last month that boosted his powers, Turkish President Recep Tayyip Erdogan mooted a second referendum on reinstating capital punishment, which would mean an end to the country's EU membership prospects.
Merkel said Berlin would not make it possible for the 1.4 million Turkish voters living in Germany to participate if the referendum were to be held.
“We will not give permission for something we are not obligated to do, and whose content we absolutely reject, for example, the death penalty,” she told public broadcaster WDR.
Turkey abolished the death penalty in 2004 as a key pillar of its bid to join the EU.
The April referendum had already opened a new rift between NATO allies Germany and Turkey, and inflamed tensions within Germany's three-million-strong community of Turkish origin.
After Germany and the Netherlands blocked campaign events by Turkish ministers in March ahead of the vote, Erdogan repeatedly accused both countries of using “Nazi” methods.
Erdogan and top Turkish officials have also threatened to rip up an EU deal for billions in aid in return for Ankara halting a flood of migrants coming to Europe because of a lack of progress in membership talks.
Germany has urged its EU peers not to end accession talks despite deep misgivings over Turkey's rights record, saying the country is key to European interests.