The soldier drove a jeep toward a guard post in the Joint Security Area just after 3 p.m. on Monday, said Col. Roh Jae-cheon, a spokesman for South Korea's Joint Chiefs of Staff.
The incident, which happened in broad daylight around 4 pm, comes at a time of heightened tensions on the Korean peninsula over the North's nuclear weapons programme.
According to the Joint Chiefs of Staff, the defector drove a vehicle into the northern side of the JSA before approaching an area just 10 meters (33 feet) from the Military Demarcation Line (MDL).
Separately, Suh Wook, a senior JCS official, told lawmakers that Seoul's military believes four North Korean soldiers fired about 40 shots toward the defector, who appeared to have been hit at least five times.
Two American soldiers also were killed in the DMZ by ax-wielding North Korean soldiers in a 1976 brawl over an attempt to trim a poplar tree.
It wasn't immediately known how serious the soldier's injuries were or why he chose to defect.
The 1953 ceasefire ending Korean War hostilities was signed at Panmunjom, and it has since hosted numerous rounds of inter-Korean talks - sometimes held in huts that straddle both sides of the border line.
"He then exited the vehicle and continued fleeing south across the line as he was sacked upon by other soldiers from North Korea", it said in a statement.
"They really want to know what is his end game", said DiMaggio, a scholar at New America who specializes in talking with rogue regimes and has spent almost two decades in secret discussions with the North Koreans.
Unlike the rest of the frontier, Panmunjom is not fortified with minefields and barbed wire and the border is marked only by a low concrete divider.
A JCS official quoted by Yonhap news agency said the South's soldiers heard a gunshot and then retrieved the unarmed soldier in the mid-afternoon.
The man made it 50 yards over the dividing line and took cover behind a building on the southern side of the line that separates the two Koreas. The US has around 28,500 troops stationed in South Korea. That, DiMaggio said, "has sent a clear signal to the North Koreans: Why should they enter a deal with us, if we're not going to stick with it?"
It was the greatest loss of life to occur in what is technically called the Joint Security Area.