Merkel made the remarks in a joint press conference with Chinese Premier Li Keqiang at Beijing's Great Hall of the People, on her seventh visit to China since taking office in 2005. (Agencies)
"If the reports are correct, it would be a serious case," Merkel said.
She added that it would be for her a clear contradiction as to what she considers to be trusting cooperation between agencies and partners.
Following revelations last year that US National Security Agency allegedly tapped Merkel's mobile phone, the reports of a German foreign intelligence service employee spying for US have sparked anger in Berlin.
US ambassador to Germany was asked to attend a meeting late on Friday at the German foreign ministry, after media reports that a 31-year-old man arrested last week had been feeding information to a US agency for two years.
"I expect now for everyone to assist in the speedy clarification of the accusations, and quick and clear statements, also by US," German Interior Minister Thomas de Maiziere told.
Germany's federal prosecutor-general confirmed last week that a man had been arrested Wednesday on suspicion of acting for a foreign intelligence service, but did not specify which one.
"All signs indicate that he was acting for the Americans," a newspaper quoted an unnamed senior official at Germany's foreign intelligence service, the BND, as saying.
The media report said that the man had worked for the CIA and handed over more than 200 documents in return for USD 34,000.
Merkel made the remarks in a joint press conference with Chinese Premier Li Keqiang at Beijing's Great Hall of the People, on her seventh visit to China since taking office in 2005.