Expanded from an earlier answer of mine

As counter-intuitive as it might sound, it is important to distinguish between Nazi antisemitism and German antisemitism. Even though the NSDAP was composed of Germans and its antisemitism drew upon many preexisting strands of völkisch antisemitism, the categorical and extreme Jewish policies of the Third Reich were very much a break with precedents both in Central Europe and Western Europe.

Karl Lueger, the antisemitic Christian Social mayor of Vienna at the fin de siècle once famously responded to criticism of his social connections to prominent Viennese Jews, "I decide who is a Jew!" Lueger's self-serving hypocrisy aside, this incident illustrates the more flexible nature of Central European antisemitism that was common throughout Western Europe in the late nineteenth and early twentieth centuries. Jews faced social prejudices, discrimination, and unofficial barriers to social advancement. Yet at the same time, Western European Jews were also intermarrying with gentiles at unprecedented levels, acculturating and assimilating to their parent culture, and some Jews like Walther Rathenau achieved a good deal of economic success in the mass industrial economy. In Germany, the twentieth century saw the start of a demographic decline of Jews as German Jews were having smaller families or emigrating and the number of individuals who self-identified as Jewish fell as some Jews blended into the wider population through assimilation or conversion.

One of the overarching trends for Central European Jews over the course of the long nineteenth century was the growing professionalization of Jews. Long-standing cultural commitments to education as well as Jewish participation in the Enlightenment contributed to conditions that allowed Jews to rise up into a bourgeois order during the drawn-out process of Emancipation. legal and social restrictions against Jews certainly remained an ever-present reality for German Jews and the professionalization of German Jews favored occupations that were much more open to Jewish participation. Fields like medicine, the law, and journalism did have a strong Jewish presence in nineteenth-century Germany, although Jews did not dominate them as many antisemites held. Ironically, state antisemitism likely contributed to this long-term trend of professionalization by cracking down on occupations traditionally associated with Jews such as hawking wares or pawnshops. The professional fields Jews tended to enter into were also comparatively low-status in the nineteenth-century Germany. Additionally, it also bears stressing that while a large portion of German Jews were becoming middle-class, there was also a number of poorer German Jews whose numbers were not insignificant. Nonetheless, the collective picture of German Jews by 1900 was one that had arisen to a respectable bourgeois status.

As the social position of Jews changed, so too did the antisemitism in Western and Central Europe. Biological antisemitism, pioneered in the nineteenth century by the likes of the French racial theorist Arthur de Gobineau, began to displace religious-based antisemitism such as the blood-libel. Antisemitism also adapted to new fears about both industrialization and immigration. Fears of Jewish bankers and industrialists controlling the global economy became more common in the fin de siècle and popularized by the likes of Lueger's Christian Socials or tracts like the fictitious Protocols of the Elders of Zion. Adding to this brew was a refugee crisis of so-called Ostjuden (Eastern Jews) from the Russian empire. Pogroms targeting Jewish communities in the Pale of Settlement began with the assassination of the Tsar Liberator Alexander II and continued intermittently through the First World War and Russian Civil War. This led to a good deal of Russian and Ukrainian Jews to make their way into Central Europe. Unlike the largely acculturated Central European Jews, the Ostjuden were largely unassimilated and significantly poorer than their Central European counterpart. As such, these refugees hewed to preexisting stereotypes and antisemitic tropes about alien and dirty Jews who refused to move with the times. This antisemitism in a new key often blended older expressions and modes of antisemitism. Anxieties about Jewish moneylenders soon gave way to concerns about global finance. Likewise, the blood libel became stripped of its religious connotations and instead became reflective of Jews' innate depravity.

The First World War helped foreground this modern form of antisemitism. Not only were there more Jewish refugees from the East, but Jews became a question mark with the increased importance of nationalism in fighting the war. European nationalism had a strained relationship with Judaism in which their confessional identity made them outsiders to the larger nation, and the war sharpened this distinction, especially for states that found themselves under acute wartime stress. In Germany, fears of German Jews shirking their patriotic duty led to a census of the frontlines in 1916 (which ironically proved that Jews were more likely to serve on the front). But despite the evidence of the census, the sentiment that Jews did not pull their own weight was not uncommon in both Germany and Austria-Hungary during the war and after. Antisemitic variations of the Dolchstoßlegende were also not uncommon, especially among the postwar Freikorps and the radical right. The Bolshevik revolution in 1917 also gave new ammunition for antisemitism and antisemitic discourse highlighted the often fictive Jewish background of the Bolsheviks as evidence that the Jews were controlling both capital and its ideological opponent, communism, in a concentrated plot to destroy the West.

But as nasty and violent as this new mode of antisemitism was, it was still something of an outlier in the wider Central European body politic. Antisemitic paramilitaries could assassinate Walther Rathenau, but his funeral galvanized a degree of support for the Republic against paramilitarism. A good many Germans and Austrians were indifferent to the Jewish question or maintained a sort of soft antisemitism of older generations that categorized Jews as aliens, but drew the line at more extreme measures directed against them. The noted German anthropologist and politician Rudolf Virchow would say in the Prussian Landtag in 1890, "the Jews are simply here. You cannot strike them dead," which summed up the ambivalence of many German gentiles had towards Jews through the twentieth century.

It was this ambivalence and conventional antisemitism that gave the NSDAP something of a wedge for a more radical solution to the Jewish problem. Although antisemitism never went away in Nazi politicking, Hitler began to recast himself as a more conventional outsider politician between 1930-33, arguing against the restrictions of Versailles and proposing to alleviate the Depression and restore the dignity of German work. Hitler also began to capitalize on the increasing perception that the Republic had failed and what Germany needed was a new form of government. Once in power, the NSDAP began a process of purging state institutions of Jews and readjusting German law to reflect a more antisemitic character. The Nuremberg Laws of 1935 took the unprecedented step stripping German Jews of most of their civil rights and unambiguously defining them as an alien, non-German entity within the Reich.

The radical antisemitism of the NSDAP was very much abetted by the more garden variety forms of antisemitism that already existed within the wider German public. Diarist like Victor Klemperer noted that antisemitism blossomed under the state's encouragement. Additionally, the NSDAP control over the police and justice system meant there was no real punishment for popular antisemitic violence. Ritualized humiliation of the Jews by the state, such as SA men parading around Jews or forcing them to clean filthy streets in public, helped further this wider radicalization of German antisemitism. It help engender the worst instincts of some Germans, but even the apathy of Germans helped the Nazis' platform of a Jew-free Europe. Contemporary accounts of these ritualized humiliations as well as photographs of them often show Germans indifferent or looking away from the Jews. This non-involvement was an involvement of sorts because it signaled to both the Jewish victims as well as their neighbors that Jews were no longer part of the German community and did not belong. The extremism of the Third Reich's antisemitism did not entirely displace older modes of antisemitism, but they often blended together. Germans involved in antisemitic humiliations and murders during the war often went at lengths to have Jews destroy religious artifacts like Torah scrolls, despite the fact that the state explicitly claimed that hatred of Jews was racial in nature, not religious. German diarists and letters from the war often entangled state propaganda when noting the final expulsion of Jews from the Reich. For example, Isa Kuchenbuch, a Red Cross volunteer, explained in her letters to her fiance that the Jewish deportations from Bremen in 1941 that the remaining Jews were "the poorest of the poor," but her sympathies for them were tempered by her belief that many of the richer Jews had already left and the Bremen's Jewish community was suffering because of its lack of solidarity. Earlier letters of hers also expressed exasperation that she could not get a desired carpet at an auction of Jewish property, and her overall tone towards the deportations was out of sight, out of mind.