South Korea has described its northern neighbour as a "serious threat", in the wake of its nuclear test in October.
Mistrust between the two sides has grown in recent months
A defence white paper said North Korea's nuclear capability along with its land army and conventional weapons had raised the threat to the South.
The assessment uses the strongest wording since Seoul began a policy of engaging with Pyongyang in 2000.
Talks aimed at dismantling North Korea's nuclear programme ended in deadlock in Beijing earlier this month.
In its biennial white paper, South Korea's ministry of defence said the threat from the North had risen, although the country was not yet a full-fledged nuclear power.
"North Korea's conventional forces, its nuclear test, weapons of mass destruction and the forward deployment of troops are a serious threat to our security," the report said.
The North had obtained an estimated 30kg of plutonium - enough for five nuclear bombs - in the past three years, while its total stockpile now stood at 50kg, the paper said.
N KOREA NUCLEAR PROGRAMME
Believed to have 'handful' of nuclear weapons
But not thought to have any small enough to put in a missile
Could try dropping from plane, though world watching closely
More than 70% of the North's ground troops and some 40% of its 820 fighter jets were deployed close to its southern border, it added.
Two years ago, the defence ministry called the North a "direct military threat".
North Korea triggered international alarm - and ensuing UN sanctions - as well as stoking regional tensions when it tested a nuclear weapon on 9 October.
Following its test, Pyongyang agreed to return to long-running multi-national talks, after walking out more than a year ago.
But despite five days of intense negotiations, the talks, hosted by China, ended without agreement just before Christmas.