The operation, the most ambitious launched by Turkey in Syria conflict, is aimed at clearing jihadists from the town of Jarabulus which lies directly opposite the Turkish town of Karakamis, the prime minister's office said.
The operation began around 4:00 am local time (0100 GMT) with Turkish artillery pounding dozens of IS targets around Jarabulus.
Turkish F-16 fighter jets and coalition war planes also hit targets inside Syria. Media said an unspecified number of elite Turkish special forces were already on the ground inside Syria.
"The Turkish Armed Forces and the International Coalition Air Forces have launched a military operation aimed at clearing the district of Jarabulus of the province of Aleppo from the terrorist organisation Daesh," the prime minister's statement said, using an Arabic acronym for the IS group.
The operation also appeared aimed at pre-empting any assault by Jarabulus by pro-Kurdish militias who also oppose IS but Turkey accuses of seeking to carve out a Kurdish region in northern Syria.
"What we have said, since the beginning, is that having Jarabulus or any other city held by IS is unacceptable," he said.
Turkey will want to show with the operation that it is serious about taking on IS, which has been blamed for a string of attacks inside the country, the latest a weekend attack on a Kurdish wedding in Gaziantep that left 54 dead.
Ankara was long accused of turning a blind eye to the rise of IS in Syria and even aiding its movements to-and-fro across the border, claims the government had always vehemently denied.
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