Washington-based 38 North, a North Korea monitoring project, cited images taken on Nov 5 showing activity at North Korea's Sinpo South Shipyard.
North Korea, under leader leader Kim Jong Un, has conducted dozens of missile tests this year.
Pentagon chief spokeswoman Dana White, however, said that "it's perilous to predict anything about what North Korea does or doesn't do, but we're continuing to monitor the situation".
THE Association of Southeast Asian Nations (Asean) has reiterated its call to rid the Korean Peninsula of nuclear weapons as it expressed "grave concern" over North Korea's missile tests, saying these "seriously threaten peace and stability" in the region.
Images of a test stand indicated continued testing of a mechanism for ejection launch of missiles from a submarine.
A United States envoy said it was hard to assess the intention of Pyongyang as there had been "no signal".
An official from South Korea's top spy agency, the National Intelligence Service, told lawmakers on Thursday that North Korea has not secured the key technologies needed to build a ballistic missile that can survive a return through the atmosphere, the Yonhap news agency reported yesterday, citing a "parliamentary source".
Last month, The Diplomat magazine quoted a U.S. government source as saying United States military intelligence had detected a new diesel-electric submarine under construction at Sinpo and dubbed it the Sinpo-C.
President Donald Trump discussed a possible free trade agreement (FTA) with Prime Minister Shinzo Abe during his trip to Tokyo, the USA ambassador to Japan said on Friday, contradicting Japanese officials who had said such talks never took place.
It said the Nov 5 images showed two large circular objects that could be sections of a submarine's pressure hull.
"China is sending an envoy and delegation to North Korea - A big move, we'll see what happens!"
North Korea is under worldwide pressure to end its weapons programmes, pursued in defiance of UN Security Council resolutions, but continues to reject U.S. calls to negotiate.
Pentagon officials, top scientists and lawmakers see these measures as a response to Pyongyang's fast-developing ballistic missile capability, which poses a serious risk to U.S. security.