"Croatia is openly aspiring to join the European Union and its aspiration should be supported," Steinmeier told reporters after the talks.
He said that Croatia had invested exceptional efforts to improve its prospects of entering the EU and NATO, referring to the apprehension of General Ante Gotovina and his transfer to the UN war crimes tribunal in The Hague.
The German official described the relations between Berlin and Zagreb as excellent, and added that there was still room for enhancing bilateral cooperation, particularly in the economic sector.
"Germany is Croatia's trading partner No. 2 and there is still space for cooperation," Steinmeier said.
He also commented on the European Commission's proposal for establishing a Western Balkan free trade zone, saying that the motion was misinterpreted in some quarters and stressed that nobody wanted to create a new Yugoslavia.
The German and Croatian ministers signed a bilateral tax avoidance agreement and an agreement regulating German-Croatian cooperation in the postwar reconstruction of Afghanistan.
Grabar-Kitarovic thanked her host for German support for Croatia's bid to join the EU and NATO.
The Croatian foreign minister, who also held talks with other officials from the government of Chancellor Angela Merkel, assessed her first official visit to Germany as very successful.