Kim Yo-Jong becomes an alternate member of the party's powerful politburo, the decision-making body presided over by her brother, the official KCNA news agency said.
The promotion was announced along with those for dozens of other top officials at a party meeting led by the leader on Saturday.
It came as the regime faces growing global pressure to curb its weapons drive following recent nuclear and missile tests.
Tensions soared as Kim traded verbal threats with US President Donald Trump, who tweeted on Saturday that "only one thing will work" to tame the isolated nuclear-armed state.
The sister, in her late 20s, has frequently been seen accompanying her brother on his "field guidance trips" and other events and is known to have been involved in the party's propaganda operations.
Both were born to the late former ruler Kim Jong-Il and his third partner, former dancer Ko Yong-Hui.
The family has ruled North Korea since its creation in 1948. The current ruler came to power after the death of his father in December 2011.
Since then he has overseen four of the country's six nuclear tests -- most recently in September -- while cementing his grip on power through a series of purges, including those targeting his uncle and half-brother.
The uncle, Jang Song-Thaek, was executed in 2013 for treason and the half-brother Kim Jong-Nam was killed by a toxic nerve agent in a Cold War-style assassination at a Kuala Lumpur airport in February.
Both the North's missile and nuclear weapons capabilities have made significant progress under the current Kim, despite a growing layer of UN sanctions.
During Saturday's party meeting, Kim acknowledged the country faced with "ordeals" under a "stern" situation, but claimed that its economy had grown this year despite ever-tighter sanctions.
He described the North's atomic weapons as a "treasured sword" to protect it from aggression.
"The nuclear weapons of the DPRK (North Korea) are a precious fruition borne by its people's bloody struggle for defending the destiny and sovereignty of the country from the protracted nuclear threats of the US imperialists," Kim was quoted as saying.
