North Korea is reportedly preparing a launchpad at the Dongchang-ri site possibly for an upcoming launch of a long-range missile.
South Korean reports say the North has upgraded a new and taller launch tower at the missile base in North Pyongan province, located near the China border.
The preparations began shortly after Pyongyang firmly rejected calls for an Iran-like nuclear deal with the country.
"We believe that the North will use the extended launch site in Dongchang-ri to fire a long-range missile longer than the Unha-3. We think (the North) will carry out a provocation around the 70th anniversary of the foundation of the Workers' Party on 10 October," a South Korean source told Yonhap news agency.
The observations follow satellite imagery of the facility, which is known as Sohae Satellite Launching Station in North Korea.
Officials believe the facility could be used to fire long-range missiles double the size of the earlier Unha-3, which was successfully launched in December in 2012.
Under UN regulations, North Korea is banned from conducting ballistic missile tests but the country has a track record of defying international norms.
Another South Korean government source, who did not wish to be identified, was quoted as saying: "We think there is credibility in the intelligence that (North Korean leader) Kim Jong-un has ordered the launch of a satellite to mark the Workers' Party anniversary. We have detected signs of what appears to be the manufacturing of a long-range rocket at an arms factory near Pyongyang."
The country is believed to be developing intercontinental ballistic missiles (ICBM) but it currently does not possess the technology to deploy them.