The nuclear threat from North Korea has dominated Malcolm Turnbull's official talks with US Vice President Mike Pence
The prime minister told reporters in Sydney the "reckless and dangerous regime puts the peace and stability of our region at risk".
Mr Turnbull said China has a leverage to influence North Korea.
"The eyes of the world are on Beijing," Mr Turnbull said.
North Korea's latest missile test fizzled last weekend, but it conducted two nuclear test explosions and 24 ballistic missile tests last year.
Mr Pence characterised North Korea as an "urgent and most dangerous threat" to peace and security in the Asia Pacific.
"While all options are on the table, let me assure you the United States will continue to work closely with Australia, our other allies in the region and China to bring economic and diplomatic pressure to bear on the regime," he said.
He echoed Mr Turnbull's calls for China to play an active role in pressuring North Korea to abandon its nuclear and missile programs.
"If China is unable to deal with North Korea, the United States and our allies will," Mr Pence said.
"We know that our security is the foundation of our prosperity."
Mr Turnbull said he was quietly confident China would step up to the mark.
Mr Pence later weighed into the controversy over claims the White House had been misleading about a US carrier strike group's push toward the Korean peninsula.
When US President Donald Trump boasted early last week that he had sent an "armada" as a warning to North Korea, the USS Carl Vinson strike group was still far from the Korean peninsula, and headed in the opposite direction.
Mr Pence said he anticipated USS Carl Vinson would be in the Sea of Japan in position in a matter of days before month's end.
