Japan has lodged a protest with the Chinese ambassador in Tokyo, after a Chinese ship sailed close to contested islands in the East China Sea.
Chinese navy has made an unprecedented entry into waters around the disputed Senkaku Islands, called Diaoyu in China.
Japanese Vice Foreign Minister Akitaka Saiki responded swiftly, summoning the Chinese ambassador to Tokyo Cheng Yonghua to register a formal protest.
Japan's top government spokesman expressed "serious concern" about the entry of a Chinese naval ship, saying it would escalate tension unilaterally.
Prime Minister Shinzo Abe told his government to closely coordinate with the United States and other countries to deal with the incident.
It emerged that three Russian naval vessels also sailed through the contiguous zone around the islands on Wednesday evening. Japanese officials say they are investigating whether there is any connection.
"Around 00:50am (local time), a Chinese naval vessel entered our nation's contiguous waters surrounding the Senkaku Islands," the Japanese Foreign Ministry said in a statement.
A Chinese Defence Ministry statement said: "Chinese naval ships sailing through waters our country has jurisdiction over is reasonable and legal.
In 2012, relations between Japan and China deteriorated after Japan bought the islands from a private owner. The islands are important because they are close to key shipping lanes, offer rich fishing grounds and lie near potential oil and gas reserves.