Koreans, Pope Francis said, should reject a “mindset of suspicion and confrontation” and find new paths to build peace.
The pontiff spoke at a Mass in Seoul’s main cathedral attended by President Park Geun-hye and North Korean defectors.
The service coincided with the start of major US-South Korea military exercises.
The annual drills, called Ulchi Freedom Guardian, last for 12 days and involve some 80,000 US and South Korean service personnel.
The exercises always enrage North Korea, which has in recent weeks conducted a series of short-range missile tests – including one as the Pope arrived.
It has threatened a “merciless” retaliatory strike in response to the drills.
North Korea and South Korea remain technically at war after the 1950-53 Korean War, which ended in an armistice and not a peace treaty.
Speaking at Myeongdong Cathedral, Pope Francis said all Koreans were “brothers and sisters, members of one family, one people”.
“Let us pray for the emergence of new opportunities for dialogue, encounter and the resolution of differences,” he said.
He also called for generosity in providing humanitarian assistance to those in need, and urged Koreans to work together as one, “with no victors or vanquished”.
Representatives from North Korea’s state-run Korean Catholic Association were invited to attend the Mass, but Pyongyang rejected this offer.
Also at the service were seven elderly women forced to work as prostitutes for Japanese troops during World War Two.
One of the women gave Pope Francis a gold butterfly pin – a symbol of their continuing struggle for justice – which he wore during the Mass.
Pope Francis, who on Saturday beatified 124 Koreans who died for their faith in the 18th and 19th Centuries, later flew out of Seoul.
The pontiff will visit the Philippines and Sri Lanka in January.
En route to Rome, Pope Francis sent a telegram to Chinese President Xi Jinping as a follow-up to a message he had sent when he flew over China to South Korea on Thursday.
“Returning to Rome after my visit to Korea, I wish to renew to your Excellency and your fellow citizens the assurance of my best wishes, as I invoke divine blessings upon your land,” Pope Francis said.
The Vatican and Beijing have no formal ties, but the decision to let Pope Francis fly through Chinese airspace is being seen as a possible sign of warmth.
When Pope John Paul II visited Seoul in 1989, he had to fly through Russian airspace to get to South Korea.
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