Pyongyang has called the drills reckless and says they could lead to 'the uncontrollable phase of a nuclear war'
North Korea has warned the US will be "pouring gasoline on the fire" by conducting a war game with its long-time southern foe.
The 10-day joint military exercise with South Korea has been condemned by Pyongyang as "reckless behaviour driving the situation into the uncontrollable phase of a nuclear war".
It views the annual drills, which have now got under way, as a provocation and a practice for invasion.
The manoeuvres come following a war of words between North Korean leader Kim Jong Un and US President Donald Trump, who has threatened to unleash "fire and fury" if America and its allies are threatened.
Last month, Pyongyang tested two long-range rockets, which experts said brought major US cities within range.
In turn, Mr Kim has threatened to fire missiles towards the US territory of Guam in the Pacific Ocean.
Tensions appeared to have calmed earlier this month, amid reports that Kim Jong-Un has delayed a decision on firing missiles towards the US pacific territory of Guam.
President Trump took to Twitter to describe the decision as 'very wise and well reasoned'.
However, state media in the North has now warned: "The joint exercise is the most explicit expression of hostility against us, and no one can guarantee that the exercise won't evolve into actual fighting."
It warned the exercises would "be like pouring gasoline on fire and worsen the state of the peninsula" and added: "If the United States is lost in a fantasy that war on the peninsula is at somebody else's doorstep far away from them across the Pacific, it is far more mistaken than ever."
Mr Kim has said North Korea can target the US "anytime and neither Guam, Hawaii nor the mainland can dodge the merciless strike".
The exercise between Seoul and Washington, which has been held since the 1970s, will be largely computer simulated and designed to hone responses to any situation from conventional weapons to a nuclear war.
About 17,500 US troops will participate in this year's drills, which represents a reduction from last year.
US defence secretary James Mattis said the smaller troop numbers were "by design to achieve the exercise objectives".
"This right now is an exercise to make certain that we're ready to defend South Korea and our allies over there," he added.
South Korea's top military officer said the current security situation on the peninsula was "more serious than at any other time" and warned Pyongyang it would "retaliate resolutely" against any attack.