With the rise of the Nazis to power, the German Football Association came fully under the party's influence. All sport, including football, was controlled by the Reichssportführer (Reich Sports Leader) Hans von Tschammer und Osten. In 1935, the newly established German cup, the Tschammerpokal, now the DFB-Pokal, was named after him. The Nazis prohibited all workers sports clubs (Arbeiter Sportvereine) and, increasingly so, all Jewish sport associations. Jewish clubs were immediately removed from all national football competitions in 1933 and had to play their own tournaments. From 1938, all Jewish sport clubs were forbidden outright.[6]

Additionally, clubs with strong connections to Jews were punished and fell into disfavor, like Bayern Munich, who had a Jewish coach (Richard Dombi) and chairman (Kurt Landauer).[7] After the annexation of Austria in 1938, FK Austria Wien, another club with strong Jewish ties, suffered from persecution and many of the club's leaders, like its chairman Emanuel Schwarz, had to escape to survive the Nazi regime.[8] Apart from those two clubs, the VfR Mannheim, VfB Mühlburg, 1. FC Kaiserslautern, Stuttgarter Kickers, Eintracht Frankfurt and FSV Frankfurt had all benefited in their pre-1933 success from a strong Jewish membership in the clubs and found themselves initially unpopular with the Nazis. Even though Jews were soon removed from all these clubs, some retained a more open-minded attitude than others and continued to be out of favour with the Nazis. The players of Bayern Munich for example were heavily criticised for greeting their former chairman Landauer at a friendly at Servette Geneva in Switzerland.[9]

The Nazis were, however, interested in furthering sport, especially football, as success in the sport served their propaganda efforts. Hans von Tschammer und Osten specifically ordered that players from former workers' sports movements be integrated in the Nazi-approved clubs, as the Nazis could not afford to lose the country's best players. Upon his orders, teams were not selected by political criteria, but by performance criteria.

Despite this, the number of active players and clubs declined in regions like the Ruhr area, where the workers' movement was traditionally strong.[10]

The fact that some famous players, like FC Schalke 04's Tibulski, Kalwitzki, Fritz Szepan, and Ernst Kuzorra, had less-than-German-sounding names and were mostly descendants of Polish immigrants, was ignored by the Nazis. On the contrary, players like Szepan successfully represented Nazi Germany in the 1934 and 1938 World Cups.[11] Jewish players like the two former internationals Gottfried Fuchs and Julius Hirsch were not as welcome. Fuchs, who had scored an incredible 10 goals versus Russia in 1912, migrated to Canada, while Hirsch was murdered in Auschwitz.[9]

In occupied territories

The Nazis' position to football and its clubs in the occupied territories varied greatly. Local clubs in Eastern Europe, such as Polish and Czech clubs, were not permitted to compete in the Gauliga. The situation was different in Western Europe, where clubs from Alsace, Lorraine, and Luxembourg took part in the Gauliga system under Germanised names.

Clubs with a Czech majority, while part of the German Reich, played out their own national, Bohemia/Moravia championship in this time, parallel to the German Gauliga Böhmen und Mähren, but were racially segregated.[12]