The leaders of the Group of Eight industrialized nations meeting in Washington, including Russia, condemned the launch. The U.N. Security Council, meanwhile, scheduled an emergency meeting for later Friday, and Washington said it was suspending plans to contribute food aid to the North in exchange for a rollback of its nuclear programs.
North Korea had announced weeks earlier that scientists would launch a long-range rocket mounted with an observational satellite, touting it as a major technological achievement to mark the upcoming 100th anniversary of the birth of the country's founder, Kim Il Sung.
The United States, Russia, Japan and others urged North Korea to call off the launch. Experts say the Unha-3 carrier is the same type of rocket that would be used to strike the U.S. and other targets with a long-range missile.
North Korea has tested two atomic devices but is not believed to have mastered the technology needed to mount a nuclear warhead on a long-range missile.
Space officials in Pyongyang refused to back down, telling reporters earlier in the week that it is North Korea's "sovereign right" to develop its space program.
State media said the Kwangmyongsong-3 satellite was fired from the Sohae Satellite Launching Station in Tongchang-ri along the west coast at 7:38 a.m. Friday.
"The earth observation satellite failed to enter its preset orbit," the state-run Korean Central News Agency said. "Scientists, technicians and experts are now looking into the cause of the failure."
North Korean space officials said the Unha-3, or Galaxy-3, rocket was meant to send a satellite into orbit to study crops and weather patterns its third bid to launch a satellite since 1998. Officials took foreign journalists to the west coast site to see the rocket and the Kwangmyongsong-3 satellite Sunday in a bid to show its transparency amid accusations of defiance.
The acknowledgment of the rocket's failure both to the outside world and to North Koreans was a surprising admission by a government that in the past has kept tight control over information. However, dozens of foreign journalists invited to cover the launch were not allowed to view the liftoff live.
North Korea had staked its pride on the satellite, seeing it as a show of strength amid persistent economic hardship while Kim Il Sung's young grandson, Kim Jong Un, solidifies power following the death of his father, longtime leader Kim Jong Il, four months ago.
"It blows a big hole in the birthday party," said Victor Cha, former director for Asia policy in the U.S. National Security Council, contacted in Washington. "It's terribly embarrassing for the North."
He said the next step would be to watch whether North Korea conducts a nuclear test, as has been speculated by the South Korean intelligence community. North Korea reportedly is making preparations for such a test.
"We have to watch very carefully what they are doing now at the nuclear test site and how they explain this with all those foreign journalists in the country," Cha said.
Greg Thielmann, a senior fellow at the Arms Control Association and a former intelligence officer with the U.S. State Department, said the failure suggests North Korea still hasn't mastered the technology it needs to control its multistage rockets a key capability the North will need if it is to threaten the United States with intercontinental ballistic missiles.
"They had a spectacular failure with a launch in 2006, the only one that they explicitly called a missile," he said. That rocket exploded in midair about 40 seconds after liftoff.
But he said it was a good thing the rocket didn't stray into Japanese or South Korean territory.
More U.S., Japanese and South Korean military assets were in place than ever before to monitor the launch, which was expected to provide vital data on North Korea's ballistic missile capabilities.
U.S. Navy minesweepers and other ships in the area were expected to begin scouring the seas for debris from the rocket, which can offer evidence of what went wrong and what rocket technology North Korea has.
U.S. Secretary of State Hillary Rodham Clinton, speaking for the Group of Eight, said earlier that all the members of the bloc agreed to be prepared to take further action against North Korea in the Security Council.
"Pyongyang has a clear choice: It can pursue peace and reap the benefits of closer ties with the international community, including the United States; or it can continue to face pressure and isolation," Clinton said Thursday.
Associated Press writers Hyung-jin Kim, Foster Klug and Eric Talmadge contributed to this report from Seoul, South Korea; Mari Yamaguchi and Malcolm Foster contributed from Tokyo; Matthew Pennington contributed from Washington.