But the North says the exercises, dubbed Key Resolve/Foal Eagle, amount to a preparation for invasion and has demanded they be cancelled.
North Korea's military on Sunday warned that it would bolster its nuclear capability and break off dialogue with the US in response to the drills.
It said it would use unspecified "merciless physical force" to cope with them, and added that it was no longer bound by the armistice that ended the 1950-53 Korean War.
"[Troops are urged] to mercilessly crush the aggressors should they intrude into the inviolable sky, land and sea of the DPRK (North Korea) even 0.001 mm"
Supreme command of North Korea's military
On Monday the supreme command of the military, headed by North Korean leader Kim Jong-il, said troops have been alerted to repel any attack and "blow up the citadel of the aggressors" if ordered.
It called for regulars and reservists to undergo training "to mercilessly crush the aggressors should they intrude into the inviolable sky, land and sea of the DPRK (North Korea) even 0.001 mm".
The US has about 28,500 troops stationed in South Korea.
South Korean officials said there were no reports of unusual military movements in the North and crossings at the heavily fortified border between North and South were going ahead smoothly.
During last year's exercise the North cut off access three times to a jointly-run industrial park at Kaesong just north of the border.
As the exercises began on Monday a small group of anti-war and pro-North Korea protesters gathered near a US military base in Seongnam, about 28km south of Seoul.
|A group of activists gathered near a US military base in Seoul to protest the drill [EPA]
About 20 activists shouting "Stop exercise aimed at attacking North Korea!" were watched closely by riot police.
"The exercise, which is obviously not for defence but for attack, is against the current peaceful situation," said You Young-jae, the protest leader.
"South Korea and the US should stop the drill which is practicing to attack North Korea."
Koh Yu-hwan, a professor at Seoul's Dongguk University, however dismissed North Korea's reaction to the military exercises as rhetoric.
"The North's strong protest is not unusual as it also protested during previous drills," he told The Associated Press.
The training comes as the US and other regional governments are pushing for the North to rejoin international disarmament talks on ending its atomic weapons programme in return for aid.
Pyongyang withdrew from six-nation talks and conducted its second nuclear test last year, drawing a tightening of UN sanctions.
It has demanded a lifting of the sanctions and peace negotiations with the US on formally ending the Korean War before it returns to the talks.
But the US and South Korea responded that the North must first return to the disarmament talks and make progress on denuclearisation.
The international sanctions have dealt a blow to the North's already impoverished economy, and a botched currency move late last year has sparked inflation and rare civil unrest.
The two Koreas are technically still at war because their 1950-53 conflict ended with an armistice and not a peace treaty.