South Korea's outgoing President Lee Myung-bak has held an emergency security meeting that included the Defence Minister, National Intelligence Service Chief and the National Security Advisor.
A statement released after the meeting warned North Korea of "serious consequences" if it went ahead with an expected nuclear test.
"The [South Korean] Government urges North Korea to immediately stop all provocative statements and actions and abide by international obligations including UN Security Council resolutions," the statement said.
"If the North miscalculates and commits a provocative act again, it would face various serious consequences."
Mr Lee will be formally replaced as President by the newly-elected Park Geun-Hye on February 25.
South Korean Defence Minister Kim Kwan-Jin later visited a front-line army unit and called for tight vigilance.
"Provocations are always possible because North Korean troops have been put on full alert," he said, adding South Korean troops should cope swiftly with any provocations.
North Korea has threatened to carry out its third nuclear test in response to UN sanctions imposed on Pyongyang for its long-range rocket launch in December.
It has also warned of "physical counter-measures" against the South if Seoul "directly participates" in the UN sanctions.
North Korea said its rocket launch was a scientific mission aimed at placing a satellite in orbit, but most of the world saw it as a disguised ballistic missile test.