During interwar period in Žagarė were living around 3000 Jewish people. The Holocaust tragedy destroyed Jewish community and its culture that were built since 18th century. In the late July 1941, the activists made a list of Jews who stayed in Žagarė and began to transfer them into ghetto. The Jews who lived nearby was also moved to Žagarė ghetto. The area of the ghetto adjoined the marketplace and included Daukanto, Malūno, Pakalnio and Gedimino streets. Non-Jewish residents of the streets were moved to another neighbourhood.
In the last days of September 1941, several local ethnic Lithuanians were marched to the town park (formally Count Naryshkin park), where they were forced to dig a dich in a shape of an “L”. In the October 2, jews from the Žagarė ghetto were ordered to gather in the market square. Commandant Mannteuffeld addressed the crowd in German, assuring them that they would all given a work to do. The Jewish men and woman, children and elderly people had to form separate lines. Panic arose among the Jews, and some tried to escape. The armbinders shot into a crowd and beat them. Scores of killed and wounded people left on the square. The survivors were forced to lie down on the ground where they had to stay until several trucks arrived. Jews were then transported to Naryshkin park. The Žagarė white armbinders guarded the ghetto and led victims to their deaths. Several German SS men who had arrived from Šiauliai supervised the killings also participated in them. The mass murder continued until very late night. On the following day another group of Jews who had been discovered and seized were brought and murdered in the same dich. Around 2236 – 2402 Jewish people were killed in Žagarė. Today, there is a monument dedicated to the victims of the genocide.