The six-times world champion romped to his fifth pole in seven starts with a one minute 28.351 second lap that made his opponents look slow.
It was the 60th pole of the German's Formula One career, five short of Brazilian Ayrton Senna's record.
BAR's Takuma Sato became the first Japanese driver to qualify on a grand prix front row, but his time was still a hefty 0.635 of a second slower than Schumacher's.
"It's always something special," said Schumacher of appearing at the Nuerburgring, the closest circuit to his boyhood home in Kerpen near Cologne.
"It's the motivation you get from all the enthusiasm you see on the grandstands. It's a race I really look forward to, especially after Monaco. Hopefully we can win here."
The German will be gunning for his sixth victory of the season after his run of five in a row ended in Monaco when he collided with Colombian Juan Pablo Montoya in the tunnel behind the safety car.
Monaco was also the first time this year that Schumacher had qualified off the front row but there was no danger of a recurrence of that on Saturday.
MAJOR BOOST
Italy's Jarno Trulli, pole-setter and first-time winner for Renault in Monaco, was third quickest and will start alongside Finland's Kimi Raikkonen on the second row -- a major boost for his struggling McLaren team.
Raikkonen, Schumacher's closest title rival last year, started on pole at the Nuerburgring in 2003 but has scored just one point so far this season and finished only twice.
Briton Jenson Button, in a BAR, shares the third row with Renault's Spaniard Fernando Alonso.
"Taku did a good lap, nice and clean...but for both of us to be destroyed by Michael like that is very surprising," said the Briton.
Ferrari's Brazilian Rubens Barrichello qualified seventh with Montoya eighth. The Colombian's team mate Ralf Schumacher, winner last year in a Williams one-two, was ninth fastest.
Trulli and Sato were both impressively quick off the start in Monaco, but Schumacher said he had nothing to fear.
"If you take away Monaco, we have been pretty good at the start," he said. "I believe that being on the right side of the grid I should be able to do a good start."
Briton David Coulthard failed to take part in final qualifying after setting the fourth fastest time in the first session before his McLaren stopped on the circuit. He will start from the rear of the grid.
Italian Giancarlo Fisichella, in a Sauber, also starts from the back after being penalised 10 places for an engine change and deciding to sit out final qualifying.
Pos. | Driver | Time |
1 | Michael Schumacher | 1:28.351 |
2 | Takuma Sato | + 0.635 |
3 | Jarno Trulli | + 0.784 |
4 | Kimi Raikkonen | + 0.786 |
5 | Jenson Button | + 0.894 |
6 | Fernando Alonso | + 0.962 |
7 | Rubens Barrichello | + 1.002 |
8 | Juan Pablo Montoya | + 1.003 |
9 | Ralf Schumacher | + 1.108 |
10 | Olivier Panis | + 1.346 |
11 | Cristiano da Matta | + 1.355 |
12 | Mark Webber | + 2.446 |
13 | Christian Klien | + 3.080 |
14 | Nick Heidfeld | + 3.253 |
15 | Giorgio Pantano | + 3.628 |
16 | Felipe Massa | + 3.631 |
17 | Gianmaria Bruni | + 5.671 |
18 | Zsolt Baumgartner | + 6.047 |
19 | Giancarlo Fisichella | |
20 | David Coulthard |