It came as US Secretary of State Rex Tillerson met with Chinese President Xi Jinping - who he hopes will help to curb North Korea's nuclear weapons programme.
North Korean state media said Mr Kim attended the test of a new high-thrust engine to propel rockets at the Sohae launch site.
Reports said the test was a success and that the engine would be used for the country's space and satellite-launching programme.
North Korea is banned by the UN from long-range missile tests but claims its satellite programme is for peaceful use.
Mr Kim said the "whole world will soon witness what eventful significance the great victory won today carries".
North Korea has a five-year plan to launch more Earth observation satellites and its first geostationary communications satellite - which would be a major technological advance.
Earlier this month, the country also launched four banned ballistic missiles which is said were training for an attack on a US base in Japan.
Some landed as close as 300km (190 miles) from Japan's northwest coast.
The test coincided with Mr Tillerson's visit to Asia.
After the Secretary of State arrived in Beijing, Donald Trump said Mr Kim had been "behaving very, very badly".
On Friday, the President accused China of doing little to address the issue.
US relations with China have been rocky, with China irritated at repeatedly being told to rein in the North.
Beijing is also suspicious of US intentions towards self-ruled Taiwan, which China claims as its own.
None of this was mentioned as Mr Tillerson met President Xi in Beijing's Great Hall of the People.
Mr Xi said: "You said that China-US relations can only be friendly. I express my appreciation for this."
Mr Tillerson said his boss, President Trump, places a "very high value on the communications that have already occurred".
"And he looks forward to enhancing that understanding in the opportunity for a visit in the future," the Secretary of State added.
He said the two countries would work together to get North Korea to take "a different course".