The Putin critic and Russian opposition leader is being weaned off mechanical ventilation and is said to be responding to speech, Charite hospital confirmed.
Despite the improvement, doctors said that "long-term consequences of the serious poisoning can still not be ruled out."
A German military lab confirmed Mr Navalny was poisoned with the Soviet-era chemical weapon last week, a move condemned by the Prime Minister and described by Chancellor Angela Merkel as "attempted murder".
Mr Navalny fell ill on a flight back to Moscow from Siberia on August 20 and was taken to hospital in the Siberian city of Omsk after the plane made an emergency landing.
He was later transferred to Germany, where doctors said there were indications he had been poisoned.
Novichok was used to poison former Russian spy Sergei Skripal and his daughter, Yulia, in Salisbury in March 2018, sparking a major investigation by British authorities and international condemnation.