"Total chaos is expected in the course of the late morning," a police spokeswoman in Bavaria said.
The city of Garmisch-Partenkirchen was the first to ring alarm bells after flooding near the nearby town of Eschenlohe prompted police to evacuate people from their homes in boats.
Floodwaters here reached levels higher than those seen around the spring of 1999, when the area had its worst floods in a century.
At Garmisch, some 12 kilometres (7.5 miles) north, the Partnach dam burst its banks, turning the town's main road into a surging river and flooding hundreds of cellars, authorities said.
All train traffic between Garmisch-Partenkirchen and the state capital Munich was suspended, while more than 700 firefighters, soldiers and police officers were sent to the area overnight to reinforce local rescue services.
At Kempten authorities warned that the level of the Iller river had risen by several meters and was lying less than two centimetres (an inch) below danger point.
Several roads in Bavaria were closed due to flooding and mudslides and the town of Balderschwang on the Austrian border could no longer be reached except by air.
A 19-year-old was injured and dramatically rescued by a passing truck when his car slid and overturned on the B310 highway between Wertach and Allgaeu, landing on its roof in a flooded field.
The weather services warned that there was more heavy rainfall on its way, saying it could reach up to 100 litres per square meter in some areas.
In neighbouring Austria one person died and six injured died in flooding at the weekend.