Artist Ottmar Hoerl posed the gnomes in the historic central marketplace of Straubing, a town in southeastern Germany, on Wednesday. The exhibit called "dance with the devil" is to run through Oct. 19.
Most of gnomes are black plastic, but about 20 are painted shiny gold.
Displaying Nazi symbols is illegal in Germany but a court ruled earlier this year that Hoerl's gnomes were clearly satire and thus allowed.
Hoerl says: "the fascist idea, the striving to manipulate people or dictate to people ... is latently dangerous and remains present in our society."