The talks follow up on a joint agreement made at the inter-Korean summit in October, calling for greater economic cooperation and pledges to step up efforts to implement a permanent peace on the Korean peninsula.
 
The three-day meeting comes as North Korea begins disabling its main nuclear complex in Yongbyon under the supervision of experts from the United States.
 
The last prime ministerial talks were suspended in 1992 following the first crisis over the North's nuclear weapons programme.
 
Relations began warming following October's summit - only the second in Korean history - and after Pyongyang proceeded with the disarmament process.
 
Lee Jae-Joung, South Korea's unification minister attending the talks, said they will "try our utmost to make this week's meeting a constructive one".
 
The priority at the talks will be the setting up of a joint fishing area around the disputed Yellow Sea border and plans for a "peace zone" to avoid a repeat of the bloody naval clashes in 1999 and 2002, local media said.
 
Details of the zone are likely to be sorted out during a separate defence ministers' meeting in Pyongyang later this month, which will discuss ways to decrease tensions along the world's most heavily-armed frontier.
 
"It'd be difficult to expect concrete discussions [on the fishing zone] but the talks will be about principles and directions," South Korea's Yonhap news agency quoted a senior unification ministry official as saying.
 
The agenda includes plans to build joint shipyards in the North, reducing red tape for thousands of workers in Kaesong north of the North Korean border and improving cross-border communications.
 
Seoul is also expected to propose a regular reunion programme for families separated since the 1950-53 Korean War.