The exercises will be held in South Korean and international waters over the next four days and have prompted an angry reaction from Pyongyang, which has described the exercise as an "unpardonable military provocation", and threatened to counter it by using their "powerful nuclear deterrence".
"The army and people of the DPRK will legitimately counter with their powerful nuclear deterrence the largest-ever nuclear war exercises to be staged by the US and the South Korean puppet forces,'' the country's National Defence Commission said in a statement on Saturday.
War of words
The statement went on to threaten a "retaliatory sacred war" that would be based on a "nuclear deterrent".
Washington said on Friday that it had no interest in getting into a war of words with the North.
"What we need from North Korea is fewer provocative words and more constructive action," P J Crowley, the US state department spokesman, said.
The North routinely threatens US and South Korean military drills held in the region, seeing them as a rehearsal for a possible invasion.
The US has 28500 troops in South Korea, and another 50,000 in Japan, but insists it has no intention of attacking the North.
But Richard Broinowski, the former Australian ambassador to South Korea , told Al Jazeera that the North Korean response was not surprising.
"They've done it every time there has been this sort of enormous wargame by South Korea and the US," he said.
"It's a provocation; it's not something that is likely to calm things down and lead to some kind of predictable result."
With tensions running high over the March sinking of the Cheonan, a South Korean warship, which left 46 South Korean sailors dead, analysts warn that the current tensions on the Korean peninsula could lead to outright confrontation.
"What's happening in and around the Korean peninsula is very worrying," Leonid Petrov, a North Korea expert, told Al Jazeera.
"The Korean War which started 60 years ago never ended and what we see now is the recurrence of tensions which might lead to the continuation of the Korean War."
Experts doubt the North has the capacity to carry out a nuclear strike, despite having the capability to build nuclear weapons and a large conventional military.
North Korea's main ally, China has said that the exercises could inflame regional tensions and compromise Chinese security.
South Korean authorities were closely monitoring North Korea's military for signs of a possible response, but spotted no unusual activity, the defence ministry said.