The official Xinhua news agency said the spacecraft was sent into a preset orbit by a "Long MarchII F" carrier rocket, which blasted off at 00:40 am (1640 GMT Sunday).
Space scientists at the Beijing Aerospace Command and Control Center said the "Shenzhou IV" successfully entered its preset orbit.
Su Shuangning, commander and leading designer of the astronaut system for China's manned space program, said Chinese astronauts, all of whom were airforce fighter pilots, had entered the spacecraft to receive training for the first time.
The launch of the "Shenzhou IV," or "Divine Vessel IV" is considered the latest dress rehearsal for China's eventual launch of a manned spacecraft.
Gu Yidong, commander and chief designer of the space application system, said a number of scientific experiments would be conducted while the spacecraft remained in space, including some involving the astronaut flight system, control of the spacecraft environment and life support sub-system.
While it remains decades behind the United States and Russia in space technology, the Chinese Communist Party appears to view putting an astronaut amongst the stars as an important prestige project. The launch came during a visit to China by German Chancellor Gerhard Schroeder.
In May, official Chinese media said a longer-term aim of China's fiercely ambitious space program was to establish a base on the moon in order to exploit its mineral resources.
Compared with the previous three unmanned space capsules launched between 1999 and March this year, Shenzhou IV "represents China's most sophisticated and fullest preparations to finalizing its goal of manned space flights," official media quoted Chinese Aerospace Science and Technology Corp. president Zhang Qingwei as saying last month.