Twitter spokesman Dirk Hensen told The Associated Press in an email Thursday that the account @hannoverticker has been blocked only in Germany, where its content is considered illegal.
"At the beginning of the year Twitter announced the so-called 'country withheld content' function, which enables us to remove illegal content in a particular country while leaving it available for the rest of the world," he said.
"In doing this we place great value on transparency; in the case of the account @hannoverticker we used this function for the first time."
For further details, he pointed to the Twitter account of the company's general counsel Alex Macgillivray, who said in a tweet that the site's administrators "never want to withhold content, good to have tools to do it narrowly and transparently."
The @hannoverticker account is used by a fringe far-right group, Besseres Hannover - Better Hannover, which Lower Saxony's state government banned last month on the ground that it was promoting Nazi ideals in an attempt to undermine German's democracy.
In a letter posted by Twitter, Lower Saxony authorities asked the company to "close this account immediately and not to open any substitute accounts for the organization Besseres Hannover."
The letter said the regional Interior Ministry's ban included an order for "the closure of all user accounts of the Besseres Hannover group."
Lower Saxony's Interior Ministry had no immediate comment.
The last tweets on the account came on the day Besseres Hannover was banned, Sept. 25. In that, the group equated living in present-day Germany with being "rudely awoken and finding yourself in East Germany" - a communist dictatorship.
When accessing @hannoverticker from Berlin on Thursday, there was a simple notice saying "this account has been withheld in: Germany."
Twitter announced the blocking function in January, insisting its commitment to free speech remains firm, despite global outrage that the social media tool of choice for dissidents and activists was being limited.
In this case, Kirsty Hughes, chief executive of the Britain-based free speech advocacy group Index on Censorship, said Twitter's decision was more about German laws prohibiting extreme right speech than the social media company's policy.
"We would argue it is perfectly fair to ban speech that is direct incitement to violence, but not to ban speech that is just extreme and doesn't incite violence," she said.
"However many years after the second world war, the question is, is it still appropriate, and whether it was ever appropriate (in Germany) - that's the source of this decision today, rather than Twitter being where one should point the finger."