The officials added that it is still not clear whether the engine would require some adjustment to be used in an ICBM, if it can indeed be used that way at all, noting that the Pentagon is still analyzing the test.
Possession of an intercontinental ballistic missile could allow North Korea to threaten the continental United States. ICBM technology is considered difficult to develop, with advanced rocket design being a necessary step.
The engine had been camouflaged under netting prior to the test. There is a major effort underway to keep track of North Korean mobile launchers.
Pyongyang called the test a "great leap forward" for its rocket program after what it termed a successful testing of a new high-thrust engine, state media reported Sunday.
The test measured the thrust power in the combustion chamber, the structural safety and reliability of the engine, and the movement of the turbine pump, the Korean Central News Agency said. The test reportedly took place at the Sohae Satellite Launching Ground in North Pyongan Province.
"This engine produces enough thrust for the first stage, possibly even the second stage, of a large ICBM," Michael Elleman, the senior fellow for Missile Defense at the International Institute for Strategic Studies told CNN.
Elleman said that the engine appeared "too large" for the ICBM prototypes that North Korea has demonstrated during military parades, but added "we think they could shrink it down and fit it onto either of the prototypes that they have paraded to date."
Separately, the US is not sure whether North Korea's military is capable of miniaturizing a nuclear warhead so that it could be mounted on a rocket, such as an ICBM, though Pyongyang has claimed this capability and US officials have said that they incorporate that ability in their planning assumptions.
Asked about the test, Pentagon spokesman Navy Capt. Jeff Davis declined to speak on matters of intelligence but said, "We watch North Korea very, very carefully and we're aware of what they're doing."
Davis added that reports of the test "would be consistent with the pattern we've seen with North Korea to continue to develop its ballistic missile program, and it's a program that we have concerns with."
The engine test came on the final day of Secretary of State Rex Tillerson's visit to Asia and hours before he was to meet with Chinese President Xi Jinping in Beijing.
Although neither side brought up the subject publicly, Tillerson was expected to raise the prospect of financial penalties on Chinese companies and banks that do business with close ally North Korea.
President Donald Trump said Sunday that he'd "had meetings on North Korea," and, without mentioning North Korean leader Kim Jong Un by name, said, "He is acting very very badly. I will tell you he is acting very badly."
Trump had previously said in a January tweet that Pyongyang would not get a nuclear-armed ICBM, saying, "It won't happen."