A huge media pack gathered at South Korea's Munsan station to witness the departure of the first North Korea-bound train since 1950.
On the other side of the border, a south-bound train departed. This carriage featured portraits of leader Kim Jong-il and his father, Kim Il-sung.
South Korean Unification Minister Lee Jae-joung (R) said the journey was "reconnecting the severed bloodline" of Korean people.
There were smiles all round and enthusiastic flag-waving as the North's train from Kumgang pulled into Jejin railway station in the south.
Travellers arriving at Kumgang in North Korea were treated to a lively welcome from local schoolchildren.
The demilitarised zone, which runs the length of the border, is heavily guarded on both sides. The gates were opened briefly to allow the trains to pass.
Although the test-run is being seen as a significant gesture, the border between the two nations remains closed, and the North is keen to keep contact to a minimum.
Not everyone was pleased with the apparent rapprochement, with a small but vocal group of South Korean protesters voicing opposition to Kim Jong-il's regime.