It is the second time in a month that Pyongyang has carried out such drills.
Last time, the exercises led to an exchange of artillery fire between North and South Korea.
But on this occasion, North Korea's live rounds fell short of the disputed western sea border and so South Korea did not respond.
"The North's shells fell in waters about 3km (2 miles) north of the NLL [Northern Limit Line, the disputed border]," Yonhap news agency quoted a spokesman from the South's Joint Chiefs of Staff as saying.
"The South Korean military is currently monitoring North Korean artillery units, while maintaining high military readiness."
South Korea's defence ministry said it was notified early on Tuesday that drills would take place near islands west of the Korean peninsula.
Firing began around 14:00 (05:00GMT), with around 50 shells fired at two locations, Yonhap said.
Warship sunkThe western sea border has long been a flashpoint between the two Koreas. The UN drew the border after the Korean War, but North Korea has never recognised it.
A similar North Korean exercise at the end of March resulted in the two sides exchanging hundreds of rounds of artillery fire, after South Korea said rounds landed in its territory.
Border islands in the area where the exercises took place are also hotspots.
In November 2010, North Korea fired shells at Yeonpyeong, killing two marines and two civilians, in what it said was a response to South Korean military exercises.
Earlier that year, a South Korean warship sank near Baengnyeong island with the loss of 46 lives. Seoul says Pyongyang torpedoed the vessel but North Korea denies any role in the incident.
Residents on all five islands were told to move to evacuation centres during the drill, Yonhap said.
Test fearsThis latest move from North Korea comes as satellite images suggest Pyongyang could be preparing to carry out a nuclear test.
South Korea's military said it had recently detected "a lot of activity" at the North's Punggye-ri test site.
The test, if it went ahead, would be Pyongyang's fourth, after tests in 2006, 2009 and 2013.
UN Security Council resolution 1718, passed in October 2006 after the first nuclear test, bans North Korea from nuclear and missile tests.
The live-fire drill also follows President Barack Obama's visit to South Korea last week, which was strongly opposed by North Korea.
Washington has led calls for Pyongyang to abandon its nuclear weapons programme.
In a statement on Monday, North Korea launched one of its strongest attacks on the South Korean leader, President Park Geun-hye, calling her a "despicable prostitute" who pandered to her "pimp", Mr Obama.
South Korea described the comments as "foul words".
