The missile was fired off the east coast of the Korean Peninsula at 6:30 p.m. Saturday (5:30 a.m. ET), South Korean officials said.
It appears to have flown about 30 kilometers (about 19 miles), well short of the 300 kilometers (roughly 186 miles) that would be considered a successful test, according to South Korean officials.
North Korean state news agency KCNA claimed that the launch was successful and said North Korean leader Kim Jong Un "guided on the spot the underwater test-fire of strategic submarine ballistic missile."
"At the observation post he was briefed on the plan for the test-fire and gave an order for it," KCNA reported.
North Korea: U.S. 'hostile'
The North claims that U.S. military action on the Korean peninsula justifies its aggressive pursuit of nuclear weapons and the means to deliver them.
Ri Jong Ryul, a former North Korean ambassador and current deputy-director general of the Institute of International Studies in Pyongyang, said the North's tests were "fair self-defensive measures" in the face of a U.S. "nuclear threat and blackmail."
He pointed to Key Resolve
, the ongoing joint U.S.-South Korean military exercises, as an example of what he termed a "hostile policy" toward North Korea by the United States.
"As long as the U.S. doesn't cancel its nuclear war exercise and its hostile policy against us, we will continue powerfully advancing with our nuclear activity without resting a day," he said.
U.S. President Barack Obama said Sunday that the United States won't talk with North Korea about changing the U.S. approach to military exercises in the region until North Korea shows it's serious about denuclearizing the Korean Peninsula.
"That's not something that happens based on a press release in the wake of a series of provocative behaviors," Obama said.
"They'll have to do better than that, and until they do, we'll emphasize our work with (South Korea) and Japan and our missile defense mechanisms to ensure we're keeping the American people safe and keeping our allies safe."
Launching a missile from a submarine has always been a military priority for North Korea, CNN's Barbara Starr reports, and if this test was successful, it would be a military victory for Pyongyang.
After previous launch attempts by Pyongyang failed, this one seems to have gone much better, one U.S. official noted.
"North Korea's sub launch capability has gone from a joke to something very serious," this official said. "The U.S. is watching this very closely."
Asked whether the test was successful, another U.S. official told CNN, "essentially yes."
Obama said that the United States is still analyzing what happened.
"What is clear," he said, "is that North Korea continues to engage in continuous provocative behavior. They have been actively pursuing an nuclear program, an ability to launch nuclear weapon.
"Although more often than not they fail in these tests, they gain knowledge each time they engage in these tests. And we take it very seriously."
The United States was among a chorus of countries denouncing the launch, noting that it violated multiple U.N. Security Council resolutions.
The Council itself strongly condemned the incident in a statement Sunday.
North Korea's "development and testing of new ballistic missile capabilities, even if launches are failures, is clearly prohibited by these resolutions," the statement said.
South Korea condemned the act, releasing a statement urging its neighbor to "refrain from additional provocations.
"This act was a serious threat against the security, against not just Korea and northeast Asia, but the world."
France called for further sanctions against the reclusive nation. A statement by the French foreign ministry said that the North Korean nuclear program "constitutes a serious threat to regional and international security."
Pyongyang carried out its fourth nuclear test in January. It said it succeeded in miniaturizing nuclear warheads to fit on medium-range ballistic missiles, which U.S. intelligence analysts say is probably true.
South Korean military on high alert
Ballistic missiles are missiles fired in an arc toward their targets.
CNN's Paula Hancocks said it was not yet known whether the latest North Korean test was a success. But she said the ability to launch ballistic missiles from submarines makes possible launch points far more difficult to detect.
The South Korean military was on high alert after the test, Hancocks said.