The weeklong exercise, which began in the East Sea (Sea of Japan) on Feburary 12, involved submarines, warships and aircraft from both sides, Yonhap news agency said.
The "SHAREM-148" drill was aimed "at practicing new anti-North Korean submarine operations and testing new anti-subs weapons systems," an unnamed South Korean navy officer told Yonhap.
North Korea declared on February 10 that it had built nuclear weapons and spurned six-way talks aimed at winding down its nuclear development program.
Seoul's defense ministry declined to confirm the Yonhap report on the US-South Korean navy drill involving a US nuclear-powered Los Angeles-class attack submarine and a 8,000-ton destroyer.
The United States and its allies have been locked in a standoff with the North over its nuclear weapons ambitions for more than two years.
North Korea has attended three sets of six-way talks. The last round was held in June 2004, but North Korea broke off a fourth round due in September citing a "hostile" US policy.
The nuclear stand-off erupted in October 2002 when Washington accused Pyongyang of running a secret weapons program based on highly enriched uranium, violating a 1994 arms control accord.
Some 32,500 US troops are stationed in South Korea to deter possible aggression from communist North Korea.