The anti-migrant party's extremists have the upper hand after electoral gains in eastern regions in September and October that have caused widespread domestic and international alarm.
Underlining the polarising effect the party has on Germany, thousands of protesters gathered outside the congress hall in the city of Braunschweig in a noisy demonstration against what they call a racist party.
Crying “Get lost!” and “All of Germany hates the AfD”, the protesters greeted arriving AfD delegates with whistles.
On the eve of the congress, around a thousand protesters, all dressed in black, also marched through the centre of the city against the far-right outfit.
Wary of any negative association, automaker Volkswagen, whose name is on the hall used by the AfD, has requested its logo be covered up.
Within the hall, tensions are also running high as 78-year-old Alexander Gauland prepares to step down from his co-chairman role, while 58-year-old Joerg Meuthen is set to defend his seat against a challenge from party radicals.
In a speech opening the congress, Gauland (below) said it was time to rejuvenate the party leadership, saying he will “make way today for someone younger.”
Bjoern Hoecke, a leading figure of the radical Fluegel (“Wing”), has not directly put forward his name for Gauland's spot.
But anyone seeking the post would have to get the backing of his faction, which is known for its criticism of Germany's culture of remembrance.
One likely candidate who might please all sides is Tino Chrupalla, a 44-year-old MP and former house-painter from the eastern state of Saxony.
Chrupalla, who met with former Donald Trump advisor Steve Bannon in Berlin earlier this year, can count on the support of Hoecke's Fluegel.
The AfD, which was only established six years ago, is riven with personal and ideological rivalries.
Yet Chrupalla is widely seen as the compromise candidate, palatable to the party's moderates and radicals alike.
His main challenger will be fellow AfD MP Gottfried Curio, a fiery orator whose parliamentary speeches have made him a far-right social media star.
Chrupalla has presented himself as a more serious candidate, but he too has prompted outrage with his rhetoric.
Last month, he was booed in parliament after accusing Chancellor Angela Merkel of treating her voters as “underlings” with “micro-aggressions against everything German”.
He has also called the “Islamisation of the West” a “reality”, saying that one could qualify it as a replacement of the population.
He is seen as a representative of the former East Germany, where the AfD took over 20 percent of the vote in three recent state elections.
Hoecke recently described Chrupalla as “one of the AfD's great representatives in the East”.
Meanwhile one Fluegel member, 49-year-old MP Nicole Hoechst, is now also planning to unseat co-leader Joerg Meuthen.
Meuthen, a university professor from western Germany, represents the more moderate wing of the party.
With 91 MPs, the AfD is now the third political force in the German parliament after the CDU and SPD.
But its support in opinion polls has stagnated at around 13 to 15 percent.
The AfD started out as a eurosceptic party but became increasingly anti-migrant and opposed to Merkel after the chancellor welcomed around one million asylum-seekers in 2015 and 2016.
“The Wing” in particular has drawn scrutiny as it has attacked one of the foundation stones of Germany's post-war political culture — atonement for its Nazi past.
Hoecke notoriously described Berlin's Holocaust Memorial as a “memorial of shame”, while his colleague Andreas Kalbitz has been accused of association with neo-Nazi organisations.
Such accusations have failed to frighten off voters, but they have drawn the attention of the secret services to the party's activities.