North Korea has staged a "successful" underground nuclear test, the state-run KCNA agency reports.
The agency says it was more powerful than an earlier test in October 2006, BBC reported.
South Korea's president immediately convened an emergency security meeting and Japan is setting up a task force in the prime minister's office.
Just hours later, North Korea appears to have test-fired a short-range missile, South Korea's Yonhap news agency reported.
Pyongyang has so far not commented on Yonhap's report.
Following the announcement from Pyongyang of its latest nuclear test early on Monday, Japanese Foreign Ministry spokesman Kazuo Kodama said Tokyo would respond "in a responsible fashion" at the UN, without giving further details.
South Korea has set up a "crisis management" team of officers at general-level.
In Washington, a state department spokesman said the US government said it was checking the report, "but we're not able to confirm at this time".
The European Union has said that the development is "very worrying".
South Korea's stock market fell 4% on the news, over fears that regional tensions would rise.
The test is bound to bring widespread international condemnation, the BBC's John Sudworth in Seoul says.
Russia's UN ambassador says that an emergency meeting of the Security Council will be held later on Monday.
'Problems resolved'
On Monday, the KCNA report said that North Korea's test was "aimed at strengthening its self-defence nuclear deterrent in every way".
"The current nuclear test was safely conducted on a new higher level in terms of its explosive power and technology of its control."
It said the results resolved "scientific and technological problems arising in further increasing the power of nuclear weapons and steadily developing nuclear technology".
The report gave no details of the location of the test.
However, South Korean officials said earlier that a seismic tremor was detected in the north-eastern part around the town of Kilju - the site of North Korea's first nuclear test.
Both South Korea's and the US geological agencies said the tremor on Monday morning indicated a nuclear explosion.
The US Geological Survey said the 4.7-magnitude quake was detected at 0054 GMT. It happened 10km (six miles) below the surface.
Last month, Pyongyang pulled out of six-party talks on its nuclear programme, in protest against international condemnation of its test-firing of a rocket on 5 April.
The UN Security Council adopted a statement calling on North Korea to comply with a 2006 resolution banning missile tests.
Pyongyang says its rocket carried a satellite, but several nations viewed it as cover for a missile test.
The six-party talks - involving the US, China, Japan, Russia and the two Koreas - have stalled over the failure of Pyongyang to verify the shutdown of the Yongbyon nuclear plant.
North Korea agreed to dismantle the facility as part of an aid-for-disarmament deal and, in response, the US removed North Korea from its terrorism blacklist.
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