Roared on by an ecstatic crowd of red-shirted German supporters, the seven times champion saw off Renault's [ Images ] Fernando Alonso [ Images ] to celebrate a record 86th victory of his career and second in a row.
Alonso, the 24-year-old champion, started on pole position for the first time this year and finished second for his 11th successive podium placing but with his overall lead over Schumacher cut to 13 points after five races.
Brazilian Felipe Massa [ Images ], Schumacher's team mate, stepped up to the podium for the first time in his 58-race career with third place.
Alonso has 44 points to Schumacher's 31. McLaren's [ Images ] Kimi Raikkonen [ Images ] has 23. Renault remain leaders in the constructors' championship with 62 points but Ferrari leapfrogged McLaren into second place with 46.
Those who had suggested that the 37-year-old German's victory at Imola two weeks ago was merely a Ferrari flash in the pan at their home circuit had to eat their words in the Nuerburgring sunshine.
Schumacher, who finished 3.7 seconds clear of Alonso, took the lead definitively after the second round of pitstops when he came in three laps after the Spaniard and came back out still ahead of him.
"If you finish first, what can you say?," declared Schumacher. "That's the way it makes everyone happy who wants to see us win...it was a great race, great strategy, great performance all the way through."
Alonso, who can now turn his thoughts to his home Spanish Grand Prix in Barcelona [ Images ] next weekend, said second was good enough in the circumstances.
"Second place I think is a fantastic result for us here. I think we were a little bit down compared to Ferrari's performance this weekend," he said.
"Also I think tyres were not working perfectly okay this weekend. So even with everything, to get the eight points means we have everything okay and we should win again."
McLaren, the team Alonso had flagged as his main rivals and that he is joining next season, were never truly in the reckoning in their 600th grand prix start despite Raikkonen overcoming his German jinx to secure a close fourth place in Massa's slipstream.
Brazilian Rubens Barrichello [ Images ] was fifth for Honda, ahead of Alonso's Italian team mate Giancarlo Fisichella [ Images ] and German rookie Nico Rosberg [ Images ], again impressive in his Williams after starting from the back of the grid.
Canadian Jacques Villeneuve was eighth for BMW Sauber [ Images ].
Fisichella, furious after being impeded by Villeneuve in Saturday's qualifying, spent most of the afternoon behind the former champion before getting past at the second round of pitstops.
Briton Jenson Button [ Images ] suffered his first retirement of the season, trudging back to the pits after his engine gave up the fight on lap 29.
"I think it was the engine. The gear was tightening up when I crossed the line and there was a lot of smoke out of the rear of the car," he said.
Compatriot David Coulthard [ Images ] had an even shorter race, the Red Bull driver caught in a collision with Toro Rosso's Vitantonio Liuzzi on the first lap.
Franck Montagny became the first French driver to start a race since Olivier Panis retired in 2004 but his debut for struggling Super Aguri lasted barely half distance.