Details are emerging about the 27 year-old who blew himself up outside a wine bar at a music festival in Ansbach on Sunday.
The Syrian refugee had arrived in Germany two years ago, his asylum claims had been rejected, he was reported to have had psychiatric problems and was facing deportation to Bulgaria.
When police searched his room they found diesel and hydrochloric acid, as well as a video of him pledging allegiance to I-S.
Bavarian Interior Minister Joachim Herrmann] says the video indicates some of the motivations of the bomber.
"He pledges in the name of Allah his allegiance to the well-known Islamic leader Abu Bakr al-Baghdadi, and expressly announces an act of revenge against the Germans because they are standing in the way of Islam, and as retribution for the killing of Muslims."
Ansbach is a small town of just 40,000 people.
Retired teacher Francis de Franco works with migrants teaching them English, and told the B-B-C the attack has come as a shock.
"Until yesterday we had here the illusion that terrorism doesn't reach little towns. Now this illusion is over. Terrorism and these problems connected with refugees has reached even a little town like Ansbach."
The wine-bar attack followed a week of deadly violence carried out by men of Middle Eastern or Asian origin against German civilians.
The incident is expected to fuel growing unease about German Chancellor Angela Merkel's "open-door" refugee policy.
German Interior Minister Thomas de Maiziere says his priority is increasing security in public areas and ensuring people's safety.
"What is particularly important to me at the moment is of course to maintain a particular presence of police forces in public spaces. So I have ordered that in railway stations and in airports, federal police forces should be visibly increased. And we will also be conducting secret manhunts near our borders."
