A South Korean naval ship fired warning shots on Tuesday after a North Korean patrol boat crossed a disputed sea border off the peninsula's west coast and fired shots back before retreating, a South Korean defense official said.
There were no casualties on the South Korean side and none of the shots by either side was aimed at the other's vessel, he told Reuters.
It was the latest in a series of similar altercations near Yeonpyeong island, which was bombed by the North in 2010 killing four people, including two civilians.
The area near Yeonpyeong has been the scene of clashes in the past that killed scores of sailors on both sides, with North Korean vessels frequently crossing the so-called Northern Limit Line, which it refuses to recognize as the maritime border.
The standoff came after a surprise visit by the highest-level delegation by North Korea at the weekend, comprised of a top military aide to the North's leader, Kim Jong Un, who met South Korean officials.
They agreed to resume dialogue on improving ties that had been cut off in February, raising hope for a breakthrough in the relationship between the rivals which remain in a technical state of war under a truce ending their 1950-53 war.
In 2010, a South Korean navy ship patrolling the area was hit and sunk in a torpedo attack killing 46 of the sailors on board. South Korea blames the North for the attack but Pyongyang denies involvement.
The attack led to the South cutting off all political and commercial exchange with the North except for a factory zone in the North Korean city of Kaesong where South Korean companies operate manufacturing facilities.
In recent years, Seoul has allowed small private groups to visit the North, mostly on humanitarian or religious trips.