German extreme Right parties have increased their political and electoral significance in recent years, in particular through some considerable regional successes in the East. However, in spite of noticeable nation-wide gains by the NPD in the Bundestag election, the extreme Right suffered from another defeat. Looking at the interplay of supply side and demand side factors, the article examines the transformations and continuities of extreme Right parties within the German party system, their performance in the 2005 general election, and the reasons for their ongoing national electoral failure. While extreme Right parties benefit from more favorable conditions related to increased voter volatility, new public issues and new cleavage structures, these parties also continuously face crucial difficulties, especially on the supply side: the cordon sanitaire is still intact, and new cleavages in relation to globalization are more convincingly and effectively utilized by left-wing competitors. The main obstacle, though, are the extreme Right agents themselves. Incorporating Zeitgeist issues, they nevertheless remain unable to actually modernize their agenda. The present and future challenge to liberal democracy may be a new level of cooperation between extreme Right parties and consolidated "informal" right-wing extremist subcultures in Eastern regional strongholds.