The unexpected fall in the ZEW index also reflected concerns about Greece, which is desperately trying to avert a sovereign debt default, some analysts said.
Read MoreECB staff mull plans for Greek 'disorderly default'
"April's fall in German ZEW investor sentiment suggests that fears over Greece are starting to dent confidence in the German economic recovery," said Jennifer McKeown, senior European economist at Capital Economics, in a note.
"At +53.3, the index remains at a high level by past standards and the fact that it is strongly positive means that the majority of investors still see economic conditions improving in future," she added.
Germany is Europe's biggest economy and is seen as one of the main beneficiaries of a weak euro.
Read More German GDP forecasts hiked on weak euro
Last week, Germany's Ifo Institute, an influential think tank, said it expected German gross domestic product (GDP) to rise by 2.1 percent in 2015, up from a previous forecast of 1.2 percent.
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