It is thought to be the second test of the North's new Musudan missile. An attempt earlier this month also failed.
The tests come amid a recent ramp-up in weapons activity as the country prepares for a rare party congress.
Reports suggest it is planning a fifth nuclear test, despite condemnation of its last test in January.
South Korean officials said the mid-range missile launch took place early Thursday morning near the eastern coastal city of Wonsan but the missile "crashed a few seconds later" in the coastal area, reported Yonhap news agency.
The incident was captured by a US surveillance satellite.
The Musudan missiles are said to be able to travel up to 4,000km (2,485 miles), within the range of US territories in the Pacific.
No confirmation of the attempt or the failure has come from North Korea, but sources in South Korea say that the movement of two so-called Musudan missiles, mounted on trucks, was detected earlier in the month.
One was launched two weeks ago and tracked but failed to go far. The same has now happened to the second, according to South Korea.
Kim Jong-un is building up to a big event in just over a week, a rare meeting of the ruling Workers' Party in Pyongyang.
He has trumpeted a series of announcements about progress towards having a nuclear-tipped missile capable of striking Washington. Failed launches indicate that the reality may not match the rhetoric.
All the same, they indicate determination. A fifth nuclear test coinciding with the congress would not be a surprise.
On Saturday, North Korea's foreign minister Ri Yong-su suggested that it would suspend nuclear tests if the US ended its annual military exercises with the South.
But US President Barack Obama dismissed the proposal, saying it was not serious and that North Korea would "have to do better than that".
Strengthened international sanctions were placed on North Korea after it tested what it claimed was a hydrogen bomb and launched a long-range missile.
Over the weekend it also claimed it fired a submarine ballistic missile.
Observers have speculated that Pyongyang is boosting the development of its weapons programs ahead of its political conference aimed at solidifying the power of its leader Kim Jong-un.
The North announced this week that the congress, which was last held in 1980, would take place on 6 May.

The commission had barred Mr Shafiq on Tuesday under a law that prevents senior officials from the era of President Hosni Mubarak from standing.
However, on Wednesday the commission upheld Mr Shafiq's appeal.
Mr Shafiq was the last prime minister to serve under Mr Mubarak, who was ousted by protests in February 2011.
"The decision to accept my client's appeal proves that the electoral committee functions as an independent body according to the rule of law," Shafiq's lawyer, Shawqi Sayyid, said, according to Reuters.
The law under which Mr Shafiq was originally disqualified bars from the presidency anyone who served in senior positions in government and the former ruling National Democratic Party under President Mubarak.
The law had been rushed through the Islamist-dominated parliament and ratified by the ruling Supreme Council of the Armed Forces (Scaf) on Tuesday.
However, in his appeal Mr Shafiq challenged the measure's constitutionality and the commission has now referred the law to Egypt's Supreme Constitutional Court.
The commission is due to announce the final list of candidates on Thursday.
Mr Mubarak's former vice-president and spy chief, Omar Suleiman, has also been disqualified for different reasons, along with two Islamists - Khairat al-Shater of the Muslim Brotherhood and Salafist Hazem Abu Ismail.
The front-runners among those left in the race are considered to be former Foreign Minister Amr Moussa, the independent moderate Islamist Abdel Moneim Aboul Fotouh and Mohammed Mursi, the chairman of the Muslim Brotherhood's Freedom and Justice Party (FJP).
The first round of voting is scheduled on 23 and 24 May, after which there is expected to be a run-off between the top two candidates in June.
The ruling Scaf, which assumed presidential powers after Hosni Mubarak was overthrown, is due to hand over to the new president on 1 July.
North Korea has test fired a mid-range ballistic missile which crashed a few seconds after launch, say South Korean military officials.
[NEXT_CONCEPT]
Egypt's election commission has reinstated former Prime Minister Ahmed Shafiq as a candidate in the country's forthcoming presidential election.