Here's how it works. If you're an American and you have a child born in Germany, that child is automatically a German citizen at birth under German law. The child is also eligible for US citizenship if you register them with the US State Department. Until age 23, the child can hold both passports. At age 23, German law requires them to choose: keep the German passport and renounce the US one, or keep the US passport and renounce the German one. They have a three-year window (from age 21 to 23) to make this decision and file the necessary paperwork.
The deadline is firm. If a dual-citizen child does nothing by age 23, German law automatically revokes their German citizenship. They retain US citizenship by default, but they lose the German passport. There is no extension, no grace period, and no way to reactivate German citizenship later without going through naturalization as an adult.
For American expats in Germany with children, this creates a real planning problem. You need to decide, years in advance, which citizenship you want your child to have as an adult. If you want them to keep German citizenship, you must not register them for US citizenship. If you want them to keep US citizenship, you must not apply for German citizenship on their behalf (though they get it automatically). If you want to preserve both options until they're old enough to choose, you must register them for US citizenship and let them hold both until age 23.
Registering a child born abroad for US citizenship requires going to the US embassy or consulate in Germany. You'll need the child's birth certificate, your US passport, and proof of your US citizenship. The process takes several weeks. There is a fee (currently around $100). Once registered, the child is eligible for a US passport.
If you want your child to renounce one citizenship at age 23, you must file the renunciation with the relevant government. Renouncing US citizenship requires going to the US embassy and filing a formal renunciation form (Form I-407 or equivalent). Renouncing German citizenship requires filing with the German citizenship authority (Behörde für Inneres, or equivalent in your state). Both processes are irreversible. Once you renounce a citizenship, you cannot get it back without going through naturalization again, which is a years-long process.
The reason for the option model is that both the US and Germany claim citizenship based on different principles. The US grants citizenship to anyone born on US soil (jus soli) and to children of US citizens born abroad (jus sanguinis). Germany grants citizenship to anyone born in Germany to at least one German parent, or to children of German citizens born abroad. When these principles collide—a child born in Germany to an American parent—both countries claim the child as a citizen. The option model is their compromise: let the child have both until they're old enough to choose.
But this exception does not extend to adults. If you're an American adult living in Germany and you want to become a German citizen, you must renounce your US citizenship first. Germany will not naturalize you as a dual citizen. The naturalization process itself takes 8 years of legal residence in Germany (or 6 years if you meet certain integration criteria). You must pass a German language test (B1 level), pass a civics test, and prove you have sufficient income to support yourself. Once you're naturalized as a German citizen, your US citizenship is gone.
Conversely, if you're a German citizen living in the United States and you want to become a US citizen, you must renounce your German citizenship. The US naturalization process takes 5 years of permanent residency (or 3 years if you're married to a US citizen). You must pass an English test, a civics test, and a background check. Once you're naturalized as a US citizen, your German citizenship is revoked.
The practical consequence is that most American expats in Germany do not pursue German citizenship. They stay on a residence permit (Aufenthaltserlaubnis) or, if they've been in Germany long enough, they apply for permanent residence (Niederlassungserlaubnis). These statuses allow you to live and work in Germany indefinitely without becoming a German citizen. You keep your US passport, your US citizenship, and your ability to return to the US if you choose.
If you're considering German naturalization, you should consult with a lawyer who specializes in citizenship law. The decision to renounce US citizenship is permanent and has tax implications. The US taxes its citizens on worldwide income regardless of where they live, but once you renounce, you're no longer subject to US tax. However, renunciation itself triggers a "exit tax" on certain assets. You should also understand that renouncing US citizenship makes it much harder to return to the US later—you'll need a visa, and visa eligibility depends on your new citizenship and other factors.
For families with children, the stakes are even higher. If you have a dual-citizen child and you're planning to stay in Germany long-term, you need to think about what citizenship you want them to have as an adult, and you need to make decisions now that will affect them at age 23. Don't leave this to chance.