The surprise talks, seen as another effort to reduce tensions between the sides, were arranged at the border village of Panmunjom just four days after Pyongyang called for a comprehensive discussion on inter-Korean relations, South Korea's Yonhap News Agency reported.
South Korea's chief delegate, Kim Kyou-hyun, who heads the secretariat of the National Security Council, said he was going to the talks with "an open attitude to explore the chance of opening a new Korean Peninsula," Yonhap said.
The talks occurred only days after the two sides agreed on a six-day event starting Feb. 20 to reunite Korean families separated since the 1950-53 Korean War. The reunion, however, remained in question as a day after the agreement the North threatened to back out if South Korea goes ahead with military drills with the United States at the end of this month.
Wednesday's discussions, led by senior officials of the two countries, were seen as crucial to improving bilateral relations, which have been strained since North Korea's long-range missile firing and its third nuclear test conducted a year ago in violation of United Nations resolutions.
The South Korean Unification Ministry announced the start of the talks but gave no details. The ministry looks after inter-Korean issues.
The North is represented by Won Dong-yon, a veteran North Korean negotiator, the New York Times said.
Before leaving Seoul, Kim also told reporters his priority would be to ensure the family reunions take place as agreed earlier at Mount Kumgang, a North Korean scenic resort on the east coast, Yonhap reported.
South Korea and the United States have said the military drills would go on as scheduled from February through April, calling them defensive in nature.
In his comments, Kim did not say whether he would bring up the issue of North Korea's nuclear weapons programs.
Yonhap reported the North has said it will only deal with the United States on the nuclear issue. Earlier this week, South Korean Defense Minister Kim Kwan-jin said the North appeared ready to conduct its fourth nuclear test, although no signs had so far been noticed at its nuclear test site.
The high-level talks also were being held a day before U.S. Secretary of State John Kerry is scheduled to visit Seoul for wide-ranging talks, including North Korea.
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