Technically, the majority of Germans during the Nazi era were Christians. About 1/3 were Catholic (and Adolf Hitler himself was born Catholic) and 2/3 were Protestant. They were technically, nominally allowed religious freedom at the time of the Third Reich. However, as with many political dictatorships, religion was actually not highly welcomed by the Nazi Party, even when it was an "approved" religion. Political power was more important than religion, and the power of the Aryan Third Reich was more important than church membership -- if one was Christian or Catholic, that is.

The Party quickly began taking steps to limit religious freedom for the churches, including consolidating the Protestant denominations into the "National Reich Church" and placing a Party member at the head of it. Meanwhile, many Catholic churches were closed, and the Catholic Youth Organization was closed in favor of the Hitler Youth Organization. As tensions grew, many Christian and Catholic churches began to protest the Nazis or provide aid to those targeted by the Reich. Many priests were arrested and sent to camps for being anti-Nazi.

Of course, the most prominent religious conflict during the Holocaust was the persecution of Jews. However, this was not only a religious conflict but an ethnic one. The Jewish religion was seen as inferior, and Jews were punished for practicing it (and occasionally but not always rewarded for converting), but Jews were also seen as ethnically inferior to the Aryans of the Reich. The role of religion vs. ethnicity in shaping the Jewish identity remains in wide debate to this day, but there is no doubt that both factors were important to the Nazi's hatred of the Jews in Europe.

The Boy in the Striped Pajamas, a young adult novel by John Boyne, takes place during the Holocaust and is told from the point of view of Bruno, a young German boy. Religious themes arise when Bruno meets Shmuel, a Jewish boy who lives on the other side of the fence. The reader understands that Bruno’s new friend is behind the fence of the concentration camp where Bruno’s father works as a Nazi officer. As Bruno gets to know Shmuel, this friendship conflicts with the anti-Semitic propaganda Bruno has been taught.

Regarding religious practices of Nazis, the German population in 1933 was about 67% Protestant and 33% Catholic. While Nazi leadership was somewhat divided in its view of the role of religion, the Nazi party generally viewed religion as somewhat of a threat. Nazism desired to transform German society into a unified national community. Religious differences would threaten that common national identity.

Hitler’s Minister for Church Affairs, Hans Kerrl, supported the idea of Christianity being adopted by the Nazi party into “Positive Christianity” that renounced the Jewish origins of the faith. Hitler’s Protestant Reich Church was a failed attempt to unify Germany’s existing Protestant churches. The Catholic Church and others were persecuted; more than 6,000 clergymen were executed or imprisoned on charges of treason. 

With the onset of war, however, Hitler softened his position on religion. Wanting to eliminate sources of contention within Germany, he announced that his regime would no longer take action against Evangelical and Catholic churches for the duration of the war. While the Nazi party saw traditional religion as a threat, elements of Nazism could be considered semi-religious with Hitler at its center as a sort of demigod.