South Korea's Joint Chiefs of Staff and the U.S. Strategic Command said it appears the missile was successfully launched but failed in its early flight stage.
The move comes a day after South Korea and the United States agreed to deploy an advanced military defense system
that could intercept North Korean missiles following continued weapons testing by Pyongyang in defiance of U.N. resolutions.
"We strongly condemn North Korea's missile test in violation of U.N. Security Council Resolutions, which explicitly prohibit North Korea's use of ballistic missile technology," said Gabrielle Price, spokeswoman for the U.S. State Department's Bureau of East Asian and Pacific Affairs.
"These actions, and North Korea's continued pursuit of ballistic missile and nuclear weapons capabilities, pose a significant threat to the United States, our allies, and to the stability of the greater Asia-Pacific," she said.
"Our commitment to the defense of our allies in the face of these threats remains ironclad."
South Korea also strongly condemned what it called North Korea's "provocative behavior," according to the Joint Chiefs.
The Submarine Launched Ballistic Missile (SLBM) was fired from the seas southeast of Sinpo City at 11:30 a.m. local time Saturday (10:30 p.m. ET Friday), from near the province of South Hamgyong.
The U.S. Strategic Command said in a statement that its systems detected "the launch of a presumed KN-11 submarine-launched ballistic missile occurred off the coast of Sinpo," and that it's believed the missile "fell" after being tracked over the Sea of Japan, also called the East Sea.
After months of talks, Seoul and Washington were in the final stages of recommending a location in South Korea to install the Terminal High Altitude Area Defense (THAAD) system.
THAAD can intercept incoming ballistic missiles as they enter what is known as their "terminal" phase -- when the missile starts to aim downward, not just in its upward launch trajectory -- at incredible speed and altitude.
It's been used for several years by the U.S. military to protect units in places such as Guam and Hawaii from potential attack, and could thwart the short, medium, and intermediate range missiles that North Korea claims it has.
Yoo Jeh-seung, the head of South Korea's Defense Policy Office, said it was a "defensive measure" to "protect alliance military forces from North Korea's weapons of mass destruction and ballistic missile threats."
"It will be focused solely on North Korean nuclear and missile threats and would not be directed towards any third party nations," Yoo said at a joint news conference attended by U.S. and South Korean officials.
The formal decision to deploy THAAD comes two days after the United States placed sanctions on North Korean leader Kim Jong Un and 10 other officials for alleged human rights abuses. That's in addition to heavy sanctions against the government for nuclear and missile activity.