South Korea has admitted it extracted a small amount of plutonium - a key ingredient in nuclear bombs - in secret research conducted in the early 1980s.
South Korean officials are liaising with the IAEA over the revelations
The news comes just a week after Seoul said 0.2 of a gram of uranium was produced in 2000, by scientists who did not have government approval.
North Korea, in its first comment on that development, said it viewed it in the context of a regional arms race.
Seoul has been trying to get the North to give up its own arms programme.
A statement from South Korea's Science and Technology Ministry said investigations showed an "extremely small quantity of plutonium was enriched between April and May, 1982".
An official at the ministry, Kim Young-shik, said scientists conducted an unauthorised experiment out of academic curiosity. He said IAEA monitors found evidence of it some years later.
An official, who spoke on condition of anonymity, told Yonhap news agency the Seoul government and the UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), had been in talks on the issue for years.
He said the experiment conformed to Seoul's commitments with the IAEA aimed at preventing the use of nuclear material for military purposes.
The latest revelation about the plutonium test will add to suspicions in the region about South Korea's nuclear ambitions.
Officials insist the later uranium experiment in 2000 was conducted for its civilian nuclear power industry, and not for military purposes.
But diplomats and foreign analysts said the uranium produced was so enriched it was almost weapons-grade, and far more enriched than is used in civilian programmes.
The IAEA has been conducting an investigation and is expected to give a preliminary report in the coming days.
North Korea said on Thursday that the admission by South Korea that its scientists secretly enriched uranium in 2000 threatened a new nuclear arms race.
UN envoy Han Song-ryol described the South's "nuclear experiment" as a "dangerous move".
"We view South Korea's uranium enrichment programme in the context of a nuclear arms race in north-east Asia," Mr Han told South's Yonhap news agency.
"It has become difficult to prevent expansion of a nuclear arms race because of South Korea's test," he said.
Officials acknowledged the IAEA should have been informed earlier about the uranium trial, but said it was a one-off test.
In response, US state department spokesman Richard Boucher said what South Korea had done "should not have happened" but "we are glad South Korea is
working in a transparent manner" to eliminate such activity.
Mr Han said that response displayed "double standards" on the part of Washington in its reactions to North and South Korea.
He said such US policy made it "worthless" to try and negotiate.
Analysts say North Korea may use the issue to delay further six-nation talks on its own nuclear programme.
The US, both Koreas, China, Japan and Russia have made little progress on resolving the two-year old nuclear stand-off on the Korean peninsula.
The talks are due to resume some time this month.