Her centre-right Christian Democrats (CDU) took 40.7%, comfortably seeing off a challenge by the Social Democrats (SPD), who secured 29.6%, BBC reports.
Mrs Merkel is hoping for a fourth term as chancellor but is under pressure.
The centre-left SPD has seen a recent surge in popularity under new leader Martin Schulz.
Saarland - a small south-western state with one million inhabitants - is currently governed by a coalition of the CDU and SPD as junior partner, mirroring the national government.
The outcome of Sunday's election in Saarland was being watched for signs of voter sentiment ahead of the 24 September general election.