Ms Merkel was greeted by King Salman and other top officials upon her arrival at the western city of Jiddah.
Like other recent female Western visitors, the German Chancellor did not cover her hair upon arrival in the conservative Islamic kingdom.
Prime Minister Theresa May also eschewed the strict dress code for women when she arrived in Riyadh, after saying she hoped to be an inspiration to oppressed women in Saudi Arabia.
Saudi Arabia enforces a conservative dress code in public, requiring women to wear a full-length robe and cover their hair, in keeping with other restrictive laws including a guardian system limiting women's movement and a ban on driving.
Foreign visitors have not always followed the protocol, and Ms Merkel follows the footsteps of Ms May, Hillary Clinton and Michelle Obama.
Ms Merkel has called for the burqa to be banned in Germany, saying it was "not acceptable in our county". "It should be banned, wherever it is legally possible," Ms Merkel said.
Last week, the German parliament voted for a draft law banning women working in the civil service, judiciary and military from wearing full-face veils. Burqas and niqabs will be prohibited in selected professions as part of the legislation, once approved by the Bundesrat state parliament.
The German leader is expected to press Gulf leaders to do more to take in refugees and provide humanitarian relief for refugees fleeing conflict in Muslim-majority countries.
Her country has provided refuge to hundreds of thousands of people from Syria, Iraq and Afghanistan in recent years.
She is scheduled to travel to the neighbouring United Arab Emirates after visiting Saudi Arabia.