The powerful version of the cryogenic engine was successfully ground tested at the Liquid Propulsion systems centre (LPSC).
The test was conducted for 635 seconds and it was successful, Vikram Sarabhai Space Centre sources in Thiruvananthapuram said.
ISRO sources said its chairman A S Kirankumar came to Mahendragiri this morning and the testing started at 4.30 pm.
A team headed by Director D Karthikesan led the testing.
Congratulating the space scientists, Prime Mintier Narendra Modi tweeted "the engine tested today will enable us to put satellites of upto 4 tons in geostationary orbit. A proud accomplishment".