Relations between Timor-Leste and Germany are cordial. Since the UN Transitional Administration of 1999, Timor-Leste has received extensive assistance (approximately 67 million euro) from Germany for nation-building. After achieving independence on 20 May 2002, Timor-Leste was recognised by Germany under international law. A German Honorary Consul is located in Dili.

The German government has decided to end public bilateral development cooperation with Timor-Leste. All projects were concluded in early 2023 and handed over to partners in Timor-Leste. Development cooperation continues through non‑state, European and multilateral channels, in particular through the churches, the EU and global initiatives such as the Central Emergency Response Fund (CERF/OCHA), the Global Partnership for Education (GPE), the Green Climate Fund (GCF), the Global Environment Facility (GEF) and the Least Developed Countries Fund (LDCF).

Since 2007, Germany has invited a number of journalists from Timor-Leste to attend further education seminars in Germany and Indonesia. Students from Timor-Leste have been invited to study in Germany on DAAD scholarships ever since 2002.