South Korean President Moon Jae-in has observed the test-firing of a new mid-range missile being developed to counter North Korean threats.
Mr Moon said Seoul must be able to militarily "dominate" the North for future engagement to work.
It is a twist on the typical pattern on the Korean Peninsula, where North Korean state media frequently issue reports about leader Kim Jong Un observing missile tests that it says are needed to combat South Korean and US hostility.
Mr Moon, a liberal who took office in May after a decade of conservative rule in South Korea, supports engagement with North Korea.
But he was quoted after the launch as saying that "dialogue is only possible when we have a strong military, and engagement policies are only possible when we have the security capability to dominate North Korea".
"Our people will feel proud and safe after seeing that our missile capability doesn't trail North Korea's," Mr Moon said, according to his spokesman, Park Soo-hyun.
Mr Park did not say how far the Hyunmoo-2 missile flew or where it landed, but said it accurately hit its target area.
North Korean missile tests present a difficult challenge for Mr Moon.
North Korea has tested several new missile systems this year, including a powerful mid-range missile that experts say could one day reach targets as far away as Hawaii or Alaska.
It also conducted two nuclear tests last year as it pursues development of a long-range nuclear missile that could reach the US mainland.
South Korea's military plans to deploy the Hyunmoo-2, which is designed to hit targets as far as 800km (500 miles) away, after conducting two more test launches.
The missile is considered a key part of a so-called "kill chain" pre-emptive strike capability South Korea is pursuing to cope with the North's growing nuclear and missile threat.
In addition to expanding its missile arsenal, South Korea is also strengthening its missile defence, which includes Patriot-based systems and a high-tech Terminal High Altitude Area Defence battery currently under deployment in the south-eastern county of Seongju.
South Korea began developing Hyunmoo-2 after a 2012 agreement with its ally, the United States, to increase the range of its weapons to 800km and raise the warhead limit to 500kg (1,100lbs).