The North Korean dictator ordered the hotline at the truce village of Panmunjom to be reopened at 6.30am.
Officials from the two Koreas exchanged their names and examined their communications lines to make sure they were working during a 20-minute conversation, Seoul's Unification Ministry said.
The hotline was shut down by North Korea in February 2016 in retaliation against the closing of a border factory town the two Koreas jointly operated.
The North's decision to open the border phone line came a day after South Korea proposed high-level discussions amid a tense standoff over North Korea's missile and nuclear programmes.
It followed Mr Kim's New Year address, in which he said he was open to speaking with the South and would consider sending a delegation to the Winter Olympics to be held just across the border in Pyeongchang in February.
Hours before the communications channel was reopened, Mr Trump, who has mocked Mr Kim as "Little Rocket Man", again ridiculed the North Korean dictator on Twitter over a warning from Mr Kim that he had a nuclear launch button within easy reach.
"Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!" Mr Trump tweeted.
The White House defended that tweet on Wednesday afternoon, saying Americans should be concerned about the North Korean leader's mental fitness, not their president's.
Asked whether Americans should be concerned about the president's mental fitness after he appeared to be speaking so lightly about nuclear threats, White House spokeswoman Sara Sanders told a regular news briefing:
“The president and the people of this country should be concerned about the mental fitness of the leader of North Korea.
“He's made repeated threats, he's tested missiles time and time again for years, and this is a president who's not going to cower down and who's not going to be weak and is going to make sure that he does what he's promised to do and that is stand up and protect the American people.”
Mr Kim's latest announcement, which was read by a senior Pyongyang official on state TV, followed a South Korean offer on Tuesday of high-level talks with North Korea to find ways to cooperate on February's Winter Olympics in the South and discuss other inter-Korean issues.
Ri Son-Gwon, chairman of the state-run Committee for the Peaceful Reunification, cited Mr Kim as welcoming South Korea's overture and ordering officials to reopen the communications. Mr Ri also quoted Mr Kim as ordering officials to promptly take substantial measures with South Korea out of a "sincere stand and honest attitude," according to the North's state TV and news agency.
US officials said Washington would not take any talks between North and South Korea seriously if they did not contribute to denuclearising North Korea.
Nikki Haley, the US ambassador to the United Nations, warned North Korea against staging another missile test and said Washington was hearing reports Pyongyang might be preparing to fire another missile.
A spokesman for the Chinese Foreign Ministry, Geng Shuang, said both sides should seize the Olympics as an opportunity to improve ties and make concrete efforts towards alleviating tensions.
"All relevant sides should grab hold of this positive trend in the Korean peninsula and move in the same direction," Mr Geng said.
Additional reporting by agencies
Welcome to The Independent's live blog on the latest updates and international reaction after North Korea reopened its long-closed border hotline with South Korea.
China has welcomed moves by North and South Korea to use next month's Winter Olympics as an opportunity for talks.
Geng Shuang, a spokesman for the Chinese Foreign Ministry, said he hopes the rivals will try to "meet each other halfway."
He said China hopes "all sides concerned will seize this positive turn of events."
Mr Geng also commented on Donald Trump's tweet, in which he boasted he had a bigger and more powerful "nuclear button" on his desk, by urging the countries to "maintain restraint" and say things that are "conducive to alleviating the situation."
This morning, South Korea says it began preliminary contacts with North Korea on the reopened cross-border communication system.
The South's Unification Ministry said the two Koreas were communicating via the channel at the border village of Panmunjom.
The statement said officials were first trying to examine whether the communicating lines were working well.
South Korea welcomed the North's decision to restore the cross-border hotline.
The South's Unification Ministry said it will try to use the communication channel to discuss its offer to hold high-level talks on how to cooperate with the North during next month's Winter Olympics in the South.
On Tuesday, Seoul proposed the rivals meet at Panmunjom on 9 January, but Pyongyang is yet to responded to the offer.
Kim Jong-un's New Year speech hints at a willingness for re-engagement with the South, experts at The Economic Intelligence Unit have said.
Anwita Basu, North Korea analyst at the EIU, said: "We believe that there are a number of potential channels of engagement, at the economic, diplomatic and cultural levels, and participation by North Korea in the 2018 Pyeongchang Winter Olympics represents a low-hanging fruit in improving inter-Korean relations.
"The same applies for the reopening of the hotline. We have gone so far as to say that there could be a possibility of the joint economic freezone in Kaesong to be reopened later this year, but that could eventually prove too optimistic.
"It is important to note that despite our positive view, we do not think talks between the two leaders is likely just yet."
Agathe L’Homme, South Korea analyst at the EIU added: "The border hotline opening also supports our view that, in the context of Donald Trump's aggressive rhetoric towards North Korea, South Korea's efforts to re-engage with the North continue to provide a useful, and much needed, channel for de-escalation.
"China will also strongly support South Korea's engagement efforts."
Theresa May refused to be drawn on Donald Trump's boast that he had a bigger and more powerful “nuclear button” than North Korean leader Kim Jong-un.
Mr Trump tweeted that he had a “much bigger & more powerful” nuclear button after Mr Kim warned “the whole territory of the US is within the range of our nuclear strike”.
The Prime Minister, who was visiting homeowners who had benefited from stamp duty reforms in Wokingham, was asked whether she was “concerned about this rhetoric” from Mr Trump.
Ms May said: “We've consistently said that the programme that North Korea has in relation to nuclear weapons and ballistic missiles is reckless.
“This is illegal and we are working with the international community, including with the United States, to bring as much political and economic pressure to bear on North Korea to see them change course.”
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