The US may have bugged Angela Merkel's phone for more than 10 years, according to German newspaper Der Spiegel.
The news report also said President Obama told the German leader he would have stopped it happening had he known about it.
Der Spiegel said Merkel's mobile telephone had been listed by the NSA's Special Collection Service (SCS) since 2002 - marked as "GE Chancellor Merkel" - and was still on the list weeks before Obama visited Berlin in June.
In an SCS document cited by the magazine, the agency said it had a "not legally registered spying branch" in the US embassy in Berlin, the exposure of which would lead to "grave damage for the relations of the United States to another government".
More top news
The way the government plans to pay for social housing tenants to buy their homes is "extremely questionable", MPs warn.
Marco Rubio was the man who was going to ride to the Republican party's rescue. What went wrong?
ITV News asked a few of Donald Trump's fans what message his victory in the New Hampshire Republican primary sends to the world.