The end of the war brought with it, too, the need for a change of direction in policy concerning what sort of models were produced. Paring down of the range meant the wide II and III gauge railroads disappeared. The development of the company's electric railroads really got going in 1925 when the 20-volt system was introduced. The model designers turned increasingly for their inspiration to the German Reichsbahn (German State Railroad) founded in 1920 for its locomotives and rolling stock, and also the whole field of accessories.

Noted toy historian Gustav Reder has called the years after 1925 those of the "Märklin Awakening" - meaning an ever-clearer tendency towards producing true-to-life models, the first steps on the road to real model railroads. Märklin's "Reichsbahn era" between 1927 and 1939 brought a whole fresh impetus. By 1929 the number of employees had risen to 900. At the beginning of the 1930s the Bing company ceased toy production, automatically making Märklin the market leader as the Nuremberg company of Karl Bub - with its cheap mass production - was not seen as a serious competitor.