Mr Moon and his counterpart Kim Jong-un watched the display after signing a deal to permanently close the north's Tongchang-ri missile facility.
"I propose that we should completely end the past 70 years of hostility and take a big stride of peace to become one again", said Mr Moon in his speech, which was broadcast live in South Korea though not in North Korea.
Andray Abrahamian, a fellow at the Pacific Forum told the BBC: "It is unprecedented that he addressed he North Korean public".
"South and North Korea agreed on a denuclearisation plan for the first time".
Moon and Kim took a cable auto together to Heaven Lake, a caldera at the top of the mountain, and walked around the area with their wives and officials from both sides.
Dressed in long black coats and accompanied by their wives, Kim and Moon raised their grasped hands while posing in front of the lake at Mount Paektu on Thursday.
Further, Kim said that the full extent of North Korean denuclearization is still dependent on American cooperation in the peace process, with policy experts wary that all of Kim's demands will be met by the powers that be in D.C.
"We should write another chapter of history between the North and the South by reflecting our new history on this Heaven Lake".
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Vipin Narang, an associate professor of political science at the Massachusetts Institute of Technology, tweeted that the Moon-Kim summit had made the Korean Peninsula safer.
"There is also the question of whether UN Security Council resolutions will have to be reversed in order for closer diplomatic and economic ties to take place between the two countries", she said.
Many South Koreans also feel drawn to the volcano, which, according to Korean mythology, was the birthplace of Dangun, the founder of the first ancient Korean kingdom, and has always been considered one of the most lovely places on the peninsula.
An active volcano, the mountain is dotted with secret camps and historical sites from Korea's guerrilla war against the occupying Japanese in the 1930-40s, in which Kim's grandfather, Kim Il Sung, played a leading role.
North Korea has been demanding a declaration formally ending the Korean War, which was stopped in 1953 by a ceasefire, but neither leader mentioned it as they read the joint statement.
A copy of an article of the North's official newspaper Rodong Sinmun dated December 26, 1980 calls Mount Paektu a "sacred mountain of revolution" spearheaded by Kim Il Sung "in the flames of the arduous 20-year anti-Japan struggle". Kim vowed to move toward denuclearization if the United States takes steps of its own.
It's unclear whether Moon will speak to reporters after his arriving in South Korea on Thursday.
Moon's office says Moon's summit with Kim began later Tuesday at a ruling Workers' Party building in Pyongyang. "It's a diplomatic coup for him". "Prior to becoming president, it looked like we were going to war with North Korea, and now we have a lot of progress", Mr. Trump said.