Vatican officials say the meeting in Rome focused on the ongoing war in the country and a way to find peace.
Ms Merkel told journalists the Holy Father had given her "a lot of encouragement" to carry on "decidedly and determinedly" to find a lasting truce.
Yesterday's meeting came as Ukrainian forces and pro-Russian separatists agreed to start pulling back heavy weapons from the front-line.
Overnight, both sides exchanged dozens of prisoners in a village in no-man's land.
The move formed a key part of the ceasefire deal, which came into force a week ago.
Francis and the German leader also spoke about combatting poverty, the problems of inequality and Germany's agenda for the upcoming G7 Summit.
It's Angela Merkel's second meeting with the Pope since he took office.
At the end of the discussions he gave the Chancellor a St Martin medallion to remind her of her job to protect the poor.