The satellite is designed to help track storms in space.
Witnesses said the high-altitude Explorer 1 was sent into orbit by a Long March 2C/SM rocket at 3:06 am (1906 GMT on Monday) from the Xichang Satellite Launching Centre in Sichuan province.
Explorer 1 is set to fly further than any other satellite in China's space history, and will monitor parts of the two magnetic fields of the Earth's atmosphere in an attempt to better understand environmental changes in space, the programme's chief scientist Liu Zhenxing said.
The mission marks the first time European experiments have been integrated with Chinese satellites and it is the first of two elements in the joint Sino-European "Double Star" project.
A polar satellite is expected to go up within six months.
China designed and assembled the satellite while eight scientific research institutes from Europe helped develop its probe equipment.
While a Sino-European first, the launch is also notable as the first time China has cooperated with developed countries in space exploration.
The European Space Agency has partially funded Double Star, agreeing to $9.5 million cash injection in a July 2001 accord.
More specifically, it will probe the Earth's magnetic field, ionosphere and middle to high layers of atmosphere.
The Double Star mission is not the only project between China and the ESA.
On 30 October, China agreed to participate in the Galileo satellite navigation system, a joint venture between the ESA and the European Union, and will contribute 200 million euros to the 3.3 billion euro project.
China has lofty plans for its space programme following its successful launch this year of a man into orbit, becoming only the third country after Russia and the United States to achieve the feat.
It has announced plans to send a spacecraft to orbit the moon within three years, and for an unmanned landing in 2010.
Tuesday's launch was the 75th carried out successfully by China since 1970, and its 33rd consecutive successful launch since 1996.