The Foreign Ministry said the ban was a "resolute move" by the German government against the PKK and expressed hope that "it would set an example and lead to concrete results in preventing all the activities of the terrorist organisation in Germany and across Europe".
The E. Xani publishing company, based in Neu-Isenburg near Frankfurt, produced the Turkish-language daily Ozgur Politika, which had a print run of 10,000 copies.
German Interior Minister Otto Schily described the paper as "the mouthpiece" of the PKK, which is also considered as a terrorist group by the European Union and the United States.
Turkey has long accused European and neighboring countries of tolerating PKK activities on their soil.
Turkish police announced on Tuesday the capture of two more suspected Kurdish rebel bombers in Istanbul. On Monday, police said three suspected Kurdish rebels were captured recently.
Police seized a total of 13kg of plastic explosives and several mobile phones, used to detonate explosives by remote-control.
Tensions are running high around the country with Kurdish rebel supporters staging daily demonstrations since Sunday to protest the solitary confinement of Kurdish rebel chief Abd Allah Ocalan on a prison island off Istanbul. Ocalan is the sole prison on the Imrali island.
Turkish authorities accused Kurdish protesters of provoking tensions and trying to undermine the country's image as it hopes to open membership talks in the European Union on 3 October.
The EU has pressured Turkey to improve human rights and cultural freedoms of the country's Kurds, who are not recognized as an official minority.
Kurdish demonstrators, armed with clubs and stones, clashed with police in the southeastern city of Siirt on Tuesday. Police said three people were injured.
More than 37,000 people have died in clashes between the military and the autonomy-seeking rebels since 1984.
Kurdish rebels have threatened to increase violence after a one-month rebel cease-fire ends on 20 September.