The operation in Norway known as ‘Trident Juncture’ will involve 50,000 troops, 10,000 vehicles and 65 boats.
Germany is the second largest provider after the US.
Although Donald Trump has been blasting Germany for not paying its Nato bills, the amount of personnel shows it is still contributing to the West’s defences.
Nato Secretary-General Jens Stoltenberg said: “The exercise sends a clear message to our nations and to any potential adversary.
“NATO does not seek confrontation. But we stand ready to defend all Allies, against any threat.”
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Russia, which itself held a huge military drill last month, was invited as an observer and accepted.
Colonel Eystein Kvarving at Norway’s Joint Headquarters said: “Forces are in position, they are integrating and starting combat enhancement training for major battlefield operations over the next two weeks.”
The exercise is by far the biggest in Norway since the early Eighties, a sign that the alliance wants to sharpen its defences after years of cost cuts and far-flung combat missions.
Increasingly concerned about Russia since it annexed Crimea in 2014, Norway has sought to double the number of US Marines receiving training on its soil every year, a move criticised by Moscow.
Russia last month held its biggest manoeuvres since 1981, called Vostok-2018 (East-2018), mobilising 300,000 troops in a show of force close to China’s border which included joint drills with the Chinese and Mongolian armies.
Nato’s war games were originally meant to involve 35,000 troops, but the number grew in recent months and included the late addition of an aircraft carrier, the USS Harry S Truman with some 6,000 personnel.
Russia’s military build-up in the region could ultimately restrict naval forces’ ability to navigate freely, Nato fears.
October 19 the Truman became the first American aircraft carrier to enter the Arctic Circle since before the fall of the Soviet Union in 1991.
Although a solid majority of Norwegians support membership of Nato, whose secretary general is former Norwegian prime minister Jens Stoltenberg, some parties on the left would prefer that the country quit the alliance and form some type of military cooperation arrangement with its Nordic neighbours.
Speaking about the exercise, Socialist member of parliament Torgeir Knag Fylkesnes said: “The effect of this activity will increase the tension between Norway and Russia.
“You have to be quite hawkish to view this as something that brings peace in any way.”