Dozens of activists had planned to launch helium-filled balloons carrying about 30,000 leaflets criticising the North's ruling Kim family.
But hundreds of police blocked the launch site near the border, forcing organisers to cancel the operation.
"They kept saying it was dangerous... We didn't buy the argument but didn't want to physically clash with them," main organiser Choi Woo-Won told AFP.
Choi said the activists would try again later in the week at an undisclosed location.
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Pyongyang has long condemned the launches and threatened retaliation. Last year North Korean frontier guards attempted to shoot down a set of balloons, triggering a brief exchange of fire across the border.
Last week the North's state-run Rodong newspaper warned that the leafleting exercises were "highly dangerous" and described the leaflets themselves as "touch-powder for conflict".
North Korea has demanded that the South Korean government ban the launches, but Seoul has refused, arguing that the activists have a democratic right to disseminate their opinions.
Cross-border tensions have flared at regular intervals this year, with the North conducting a series of ballistic missile tests in anger at joint US-South Korea military drills.