Two civilians were also injured, reports said, and four of the marines were in a serious condition.
South Korean troops have returned fire and Seoul has scrambled F16 jets to overfly island after the shelling.
South Korea’s YTN television said several houses were on fire and that shells were still falling on Yeonpyeong island, home to about 1200 people near the tense Yellow Sea border.
TV pictures showed black and white smoke rising from the island.
The South Korean military went on its highest state of alert, the defence ministry said, and YTN reported that South Korean air force jets were scrambled to the island.
A ministry spokesman said: “A North Korean artillery unit staged an illegal firing provocation at 2.34pm local time (1634 AEDT) and South Korean troops fired back immediately in self-defence.”
The firing came after North Korea’s disclosure of an apparently operational uranium enrichment programme — a second potential way of building a nuclear bomb — which is causing serious alarm for the United States and its allies.
Some 50 North Korean shells landed on the South Korean island of Yeonpyeong near the tense Yellow Sea border, causing some injuries and damage to dozens of houses, YTN television reported.
Houses on fire
One island resident, Lee Jong-Sik, told YTN: “At least 10 houses are burning. I can’t see clearly for the smoke. The hillsides are also on fire.
“We were told by loudspeakers to flee our homes.”
Tensions on the divided peninsula have been acute since the sinking of a South Korean warship in March, which Seoul says was the result of a North Korean torpedo attack. Pyongyang has angrily rejected the charge.
In late October, North and South Korean troops exchanged fire across their Cold War border, coinciding with a state of high alert for the South’s military in the buildup to the G20 summit of world leaders in Seoul earlier this month.
The latest incident erupted as a US special envoy headed to China Tuesday to seek its help in curbing the new nuclear project, revealed to US experts who described a sophisticated programme by North Korea to enrich uranium.
Stephen Bosworth has also visited South Korea and Japan this week to discuss the disclosure, which US officials say would allow the isolated North to build new atomic bombs, at a time when it is undergoing a dynastic change of power.
Bosworth, speaking in Tokyo, ruled out a resumption of stalled six-nation talks — aimed at disarming the North of nuclear weaponry in return for aid and other concessions — while work continues on the enrichment programme.
“We do not contemplate resuming negotiations while active programmes are underway or while there is a possibility that North Koreans will test another nuclear device or test a missile,” he told reporters.
China under pressure
China chairs the talks and is also the North’s sole major ally and economic prop. It has come under pressure to play a leading role in resolving the latest nuclear dispute.
Bosworth, US special representative for North Korea policy, said Washington was reaching out to six-party partners China, Russia, Japan and South Korea.
He said China and other parties were committed to a September 2005 denuclearisation accord, “but we are very concerned as to the sincerity of the (North’s) approach to this”.
The White House said the uranium enrichment claims contradicted Pyongyang’s past pledges but it left the door ajar for “serious” negotiations.
“The administration believes the six-party process can play an important role if and when the North Koreans take that six-party process to move toward denuclearisation seriously,” spokesman Robert Gibbs said Monday.
“We do not wish to talk simply for the sake of talking. The North Koreans have to be serious about living up to their obligations.”
The North shut down its ageing gas graphite reactor in 2008 under a six-party deal, after stockpiling enough weapons-grade plutonium for possibly six to eight small bombs.
But it abandoned the forum in April 2009, a month before its second nuclear test, and announced in September last year that it had reached the final stage of enriching uranium.
The North, showing off its centrifuges to the US experts this month, said the operation would fuel a civilian electricity project. But US officials say the real intention is to build a new generation of bombs.