Kim applauded during the event and shook hands with South Korean performers, even taking a group photo with them after their performance, according to South Korean media pool reports from Pyongyang.
Short pool TV footage also showed Kim, clad in a dark Mao-style suit, clapping from the second-floor VIP stand as South Korean Culture Minister Do Jong Hwan bowed and greeted North Korean spectators looking on from the first floor.
"We should hold culture and art performances frequently," Kim told South Korean performers. Kim also asked the performers to tell South Korean President Moon Jae In that the two Koreas should hold a similar event in Seoul in the northern autumn, the pool reports said citing an unidentified South Korean performer.
Kim also talked about Red Velvet.
"There had been interests in whether I would come and see Red Velvet. I had initially planned to attend a performance the day after tomorrow but I came here today after adjusting my schedule," Kim was quoted as saying. "I thank you for this kind of gift to Pyongyang citizens."
It was the first time a North Korean leader had attended such a South Korean performance. Before the performance, South Korea last sent a pop singer to North Korea in 2005.
North Korean concertgoers waved their hands from their seats when South Korean stars joined together to sing a popular Korean song, Our wish is unification. the TV footage showed.
Full video of the performance wasn't immediately available. The South Korean group includes prominent singers such as Cho Yong Pil, Lee Sunhee and Cho Jin Hee, who all previously performed in Pyongyang during a past era of detente.
The ongoing cooperation steps between the rivals began after North Korea took part in February's Winter Olympics in Pyeongchang, South Korea. During the games, a North Korean art troupe performed in South Korea, and Moon and his wife watched it with visiting senior North Korean officials including Kim Yo Jong, who became the first member of the North's ruling Kim family to visit the South since the end of the 1950-53 Korean War.
Kim is to meet Moon at a border village on April 27 and US President Donald Trump in May in separate summit talks.
Tomorrow, the South Korean K-pop stars plan to hold a joint performance with North Koreans. Meanwhile, a South Korean taekwondo demonstration team also held a performance in Pyongyang on Sunday.
The music tour could provide a test of whether North Korea's attitude to the rest of the world is truly thawing.
"The whole purpose of cultural exchange is to open the gates for better relations between the North and the South, which have been strained for a decade," said Kang Dong Wan, a professor at Dong-a University and a leader of the Busan Hana Centre, an institute that helps North Korean defectors in the South Korean port city of Busan. "There is a strong political motive to boost the mood ahead of the summit."
When K-Pop boy band Shinhwa performed in North Korea in 2003 as part of a similar cultural diplomacy venture, the audience - dressed in suits and traditional dresses - greeted them with silence and stony stares. One of the band members, Eric Mun, told reporters that they looked at the singers "with eyes like shooting lasers," according to Yonhap.
That year, North Korea withdrew from the nuclear Nonproliferation Treaty and threatened to test atomic weapons. President George W. Bush had labeled them a member of the "axis of evil" in 2002.
Fifteen years later, Kim is seeking to engage the region's major powers after advances in his nuclear programme prompted the United Nations to tighten sanctions and Trump to threaten war.
- additional reporting AP