The ruling Workers Party official daily Rodong Sinmun covered its front page with colour photographs showing thousands of tightly packed soldiers and people applauding in Pyongyang's Kim Il-Sung square, which was decorated with large portraits of the North's late leaders.
"We heartily celebrate the successful test launch of the Hwasong-15 which showed Chosun (North Korea)'s power and greatness to the whole world", read one banner held up by the crowd, referring to the missile.
The US in response warned that Kim Jong-Un's regime would be "utterly destroyed" if its pursuit of a long-range nuclear missile arsenal provokes a military clash, and has battled to maintain international solidarity in the face of North Korea's nuclear threat.
Kim himself was absent from the celebrations -- he usually stays away from such events -- but Friday's gathering drew key military, party and government leaders.
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"Long Live the General Kim Jong-Un who has brought us the great historic cause of nuclear statehood", another banner read.
He said that the United States had been "jolted" at the strengthening of North Korea's nuclear force and could attempt to commit "robber-like" provocative acts.
He repeated Kim's warning that the North would respond with the "highest level of hard-line countermeasure in history".
Kim first made the threat in September in response to US President Donald Trump's UN speech threatening to destroy the North and mocking him as "Little Rocket Man".
But analysts remain unconvinced that the North has mastered the technology required to launch and direct a missile, and ensure it survives the difficult re-entry into the Earth's atmosphere.
Tensions are expected to rise further in the coming week as South Korea and the United States launch a massive air force drill mobilising some 230 aircraft including six US F-22 Raptor stealth jet fighters.