Spokesman Richard Boucher told reporters, "It's true the North Koreans have restarted their five megawatt electricity reactor."
While en route back to the United States Wednesday, Powell had praised the North Korean government for keeping the reactor idle, saying Pyongyang had made a "wise choice."
But shortly after Powell's departure a plume of smoke reportedly rose over the reactor signaling its renewed operation.
"When the secretary said they had not restarted their five megawatt electricity reactor, at that time, they had not, or it was not known that they had," Boucher said Thursday. "And so, as we do today, as he did the other day, we reflect the best information we have available at the time."
The reactor plant, located in Yongbyon, 55 miles north of the capital, Pyongyang, was closed down and sealed in 1994 after North Korea agreed to stop its nuclear program in exchange for aid from the United States.
North Korean officials have said the country needs the reactor for electricity. However, Boucher said Thursday that the plant is not capable of producing significant amounts of electricity and the reactor's true purpose is to produce weapons.
"This reactor is not a real electricity producer. It produces barely more energy than it consumes. And therefore the only reason to operate a reactor like this, is to produce spent fuel that can then be turned into plutonium for weapons," he said.
Asked about the move to restart the reactor, White House spokesman Ari Fleischer said, "North Korea continues to put itself on a path that is provocative and isolationist, that sets itself back from other nations in the region and other nations in the world."
"North Korea has had a pattern in the past of engaging in activities that they use as blackmail in an effort to obtain rewards from around the world, and that pattern will not be honored," Fleischer said.
Spokeswoman Melissa Fleming of the International Atomic Energy Agency said the re-start of the reactor could not be confirmed without inspectors on the ground.
"However, if this is true, the IAEA deplores the operation of North Korea's nuclear facilities without the presence of safeguards inspectors," Fleming said. "Starting this now un-safeguarded nuclear facility will further demonstrate North Korea's disregard for its nuclear nonproliferation obligations. The IAEA's board of governors has confirmed that North Korea's safeguards agreement with the IAEA remains biding and in force."
U.S. officials claim the North Korean nuclear plant could finish a first batch of nuclear weapons in about a year, the Associated Press reported.
The process, however, could be accelerated if North Korea starts a nearby "re-processing" plant that would allow it to use spent-fuel rods it already possesses to make bombs or warheads.
During his visit to South Korea, Powell said North Korea's government "takes what limited resources it has and invests it into an army that hangs over the 38th parallel in great strength, a leadership that spends its limited resources on developing nuclear weapons, resources that should be going to the people."
North Korea has repeatedly called for direct talks with U.S. officials on the nuclear matter. However, U.S. officials have so far rejected that approach, opting instead to build an international effort to deal with the issue. While in the region, Powell talked with the leaders of Japan and China, imploring them to pressure North Korea into abandoning its nuclear aspirations.