The medium-range missile “blew up almost immediately” following the launch attempt from a base in the Sinpo area early on Sunday, according to US military.
Former Conservative foreign secretary Sir Malcom Rifkind said it was possible the weapon either malfunctioned or was sabotaged by a US cyberattack.
The incident came a day after a huge military parade in the capital Pyongyang, which was feared to have featured a new type of intercontinental ballistic missile (ICBM).
US officials said they were certain the weapon in the failed launch was not an ICBM, which has a minimum range of 3,400 miles and is designed to carry nuclear warheads.
International concern has been increasing over the deteriorating situation, with China expressing fears war could break out “at any moment”.
Speaking about North Korea, US national security adviser Lieutenant General HR McMaster said the rogue state’s actions “just can’t continue”.
He said: “This latest missile test just fits into a pattern of provocative, destabilising, and threatening behaviour on the part of the North Korean regime.
“And I think there is international consensus now, including the Chinese, and the Chinese leadership, that this is a situation that just can’t continue.”
He said the US was working with the Chinese leadership to “develop a range of options”.
US President Donald Trump tweeted: “Our military is building and is rapidly becoming stronger than ever before. Frankly, we have no choice!”
Foreign Secretary Boris Johnson tweeted: “I strongly condemn the latest North Korean missile launch. They must stop these belligerent acts and comply with UN resolutions.”
The North, under leader Kim Jong-Un, launched a ballistic missile from the same region earlier this month ahead of a summit between the the US and China.
On that occasion the ballistic missile flew for about 37 miles (60km) before landing in the Sea of Japan.
Mr Trump has put Pyongyang “on notice” over fears the country is developing a weapon that could threaten the US.
On Saturday morning, North Korea warned America to end its “military hysteria” or face retaliation.
The reclusive state said it was prepared to respond to any attacks with “nuclear attacks of our own style”.
China, Pyongyang’s sole major ally, has warned that the tensions must be stopped from reaching an “irreversible and unmanageable stage”.
The US, which has moved an aircraft carrier and several other warships towards the Korean peninsula, has previously warned its policy of “strategic patience” with North Korea is over.