They are also accused of using far-right chatrooms where extremist content, such as Swastikas and other Nazi symbols, that breaches the German constitution was shared.
The incident is embarrassing for German police and security agencies, who have faced accusations of not doing enough to unearth potentially violent nationalists in their ranks.
It is a sensitive issue in a country where awareness of the World War Two genocide of millions of Jews by the Nazis under Hitler is strong.
"This is a disgrace for the NRW police," said NRW Interior Minister Herbert Reul, announcing an investigation against 29 male and female officers.
Some of the suspects could be charged with disseminating Nazi propaganda and hate speech and could be dismissed from the police. Others are accused of failing to report their colleagues.
"I'm appalled and ashamed," said Frank Richter, chief of the police force in the city of Essen where most of the suspects worked. "It is hard to find words."
German prosecutors said last month they were investigating a retired police officer suspected of sending threatening emails, signed with the name of a gang of neo-Nazi killers, to prominent figures of immigrant background.The emails, including some sent to legislators with a Turkish background, were signed "NSU 2.0," a reference to the "National Socialist Underground" neo-Nazi gang, which killed 10 people, mainly immigrants, between 2000 and 2007.