The working-level discussions, which began at around 10:00 am (0100 GMT) in the border truce village of Panmunjom, were aimed at building a framework for ministerial-level talks tentatively scheduled for Wednesday in Seoul.
The agenda will focus on restoring suspended commercial links, including the Kaesong joint industrial complex that the North effectively shut down in April as tensions between the historic rivals peaked.
"The overall atmosphere was... Calm and the discussion proceeded with no major debates," the South's Unification Ministry spokesman Kim Hyung-Seok told reporters after the morning session.
The talks came about after an unexpected reversal on Thursday from North Korea, which suddenly dropped its default tone of high-decibel belligerence and proposed opening a dialogue.
South Korea responded swiftly with its offer of a ministerial meeting in Seoul, the North countered with a request for lower-level talks first and -- after some relatively benign to-and-fro about the best venue -- today's meet in Panmunjom was agreed.
In a further signal of intent, North Korea on Friday restored its official hotline with the South, which it had severed in March.
The move towards dialogue has been broadly welcomed -- given the threats of nuclear war that were being flung around in April and May -- but there is sizeable scepticism about Pyongyang's intentions.
"The North Korean offer has all of the hallmarks of Pyongyang's diplomacy," said Stephan Haggard, a North Korea expert at the Peterson Institute for International Economics.
"Pyongyang is 'sincerely' and 'magnanimously' inviting the South to fix, and pay for, problems of the North's own creation," Haggard said.
The North also wants to discuss resuming tours by South Koreans to its Mount Kumgang resort. These were suspended after a North Korean soldier shot dead a South Korean tourist there in July 2008.
Kaesong and Mount Kumgang were both significant sources of scarce foreign currency for North Korea, which is squeezed by UN sanctions imposed over its nuclear weapons programme.
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