China denies it is competing with Japan |
The satellite, named Chang'e I, slowed down as it reached lunar gravitational pull, 200km (120 miles) from the Moon.
Scientists intend to keep the probe in orbit for one year while it studies the surface and beams back images.
China's lunar mission comes just weeks after Japan launched a similar module, but officials in Beijing denied an Asian space race was under way.
Long Jiang, deputy commander of spacecraft systems of China's lunar exploration programme, said China wanted to use its space mission to work with other countries.
"We are willing to co-operate with the rest of the world to the benefit of humankind, but as to what kind of co-operation, it depends on specific circumstances," Mr Long said.
Japan's lunar probe entered orbit in early October, and India is planning a mission for April next year.
Pace of exploration
Analysts believe China's launch, from the Xichang Centre in south-west Sichuan province, is a key step towards its aim of putting a man on the Moon by 2020.
State TV broadcast the launch of the unmanned Chang'e I, named after a Chinese goddess who flew to the Moon.
Efforts by Asian nations to advance their space programmes have gathered pace in recent years.
In 2003, China became the first Asian nation to use its own rocket to put an astronaut in space.
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