The US is to tighten sanctions on North Korea and step up diplomatic moves aimed at pressuring the country to end its nuclear and missile programmes.
President Donald Trump's new strategy was announced after a special meeting with US senators.
Earlier, the top US commander in the Pacific defended the deployment of an advanced missile defence system in South Korea.
Tensions have risen amid fears the North is planning new weapons tests.
"The United States seeks stability and the peaceful denuclearisation of the Korean peninsula," a joint statement issued by Secretary of State Rex Tillerson, Defense Secretary Jim Mattis and Director of National Intelligence Dan Coats said.
"We remain open to negotiations towards that goal. However, we remain prepared to defend ourselves and our allies."
"The president's approach aims to pressure North Korea into dismantling its nuclear, ballistic missile, and proliferation programs by tightening economic sanctions and pursuing diplomatic measures with our allies and regional partners," the US statement said.
The North is already under strict UN sanctions over its weapons programmes.
Earlier Admiral Harry Harris, head of US Pacific Command, said the US would be ready "with the best technology" to defeat any missile threat.
The deployment of Terminal High-Altitude Area Defense (Thaad) system in South Korea was aimed at bringing North Korean leader Kim Jong-un "to his senses, not to his knees", he said.
Admiral Harris said he believed that North Korea would try to attack the US as soon as it had the military capabilities.
"With every test Kim grows closer to his goal, which is using nuclear weapons on US cities," he told the House armed services committee in Washington DC.
China says the deployment of Thaad will destabilise security and there have been protests in South Korea itself, where three people were injured in clashes with police as the system was being delivered to a former golf course on Wednesday.