North Korea's foreign ministry said it was quitting the long-running six party talks on its nuclear programmes and would "not be bound by any agreement reached at the talks".
The ministry also said it was taking steps to reactivate its partially-dismantled Yongbyon nuclear facility.
The International Atomic Energy Agency (IAEA) said it had been instructed to remove seals and equipment from the Yongbyon reactor and that its monitors had been ordered to leave North Korea.
Meanwhile, US State Department spokesman Robert Wood said: "The US government experts and staff monitoring the shutdown and disablement of the Yongbyon facilities have been asked by North Korean authorities to depart."
Analysts say South Korea may soon announce that it is signing up to the controversial US-led Proliferation Security Initiative (PSI) in response.
Membership of the PSI would allow South Korea to intercept any ships heading for the North which are believed to be carrying weapons or other items covered by existing sanctions.
N Korea must end nuclear 'threats'
The White House has called on North Korea "to cease its provocative threats and to respect the will of the international community and to honour its international commitments and obligations".
Spokesman Robert Gibbs defended the UN statement, and said withdrawing from negotiations was "a serious step in the wrong direction" for North Korea.
US Secretary of State Hillary Clinton has described North Korea's reaction as "an unnecessary response to the legitimate statement put out of concern by the Security Council".
China and Russia - the North's neighbours and closest allies - have already urged North Korea to reconsider its decision, with Beijing calling for "calm and restraint".
Japan, whose territory the rocket flew over, said returning to the talks was the best option for North Korea.
"Based on close co-operation with all countries involved, starting with the US, we want to demonstrate progress in the six party talks," said Chief Cabinet Secretary Takeo Kawamura.
IAEA inspectors went to North Korea following a landmark deal in February, under which it agreed to end its nuclear ambitions in return for aid and political incentives.
Feb 2007 - North Korea agrees to close its main nuclear reactor in exchange for fuel aid
June 2007 - North Korea shuts its main Yongbyon reactor
June 2008 - North Korea makes its long-awaited declaration of nuclear assets
Oct 2008 - The US removes North Korea from its list of countries which sponsor terrorism
Dec 2008 - Pyongyang slows work to dismantle its nuclear programme after a US decision to suspend energy aid
Jan 2009 - The North says it is scrapping all military and political deals with the South, accusing it of "hostile intent"
5 April 2009 - Pyongyang launches a rocket carrying what it says is a communications satellite
14 April 2009 - After criticism of the launch from the UN Security Council, North Korea vows to walk out of six-party talks
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.