"The North launched what was believed to be an SLBM from waters off the (northeastern) port of Sinpo at around 11:30 am (0230 GMT)", the South Korean defence ministry said in a press statement.
No further details were immediately available.
North Korea previously fired an SLBM on April 23 in a test hailed as an "eye-opening success" by leader Kim Jong-Un, who at the time declared his country had the ability to strike Seoul and the US whenever it pleased.
Tensions have soared since Pyongyang carried out its fourth nuclear test in January, followed by a series of missile launches that analysts said show the North is making progress toward being able to strike the US mainland.
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The plan to deploy the powerful THAAD system in South Korea has angered Beijing and Moscow, which both see it as a US bid to flex military muscle in the region.
Pyongyang lashed out at Washington on Friday, warning North Korea would instantly cut off all diplomatic channels with the US if the sanctions were not lifted.
The North's foreign ministry called the sanctions against Kim "the worst hostility and an open declaration of war", vowing to take "the toughest countermeasures to resolutely shatter the hostility of the US".
It said any problem arising in relations with the US would be handled under its "wartime law".