South Korean women's basketball player Lim Yung-hui and North Korean footballer Ju Kyong-chol carried the blue and white flag as the Korean athletes paraded into Jakarta's Gelora Bung Karno stadium.
It is the second such symbolic gesture this year by the two Koreas, who also walked together at the Pyeongchang Winter Olympics opening ceremony -- an event that heralded an unprecedented warming of ties.
The North and South, still technically at war, are also joining forces in women's basketball, canoeing and rowing during the 40-sport, two-week regional Olympics.
The athletes marched together to the song "Arirang", considered the most well-known folk song on the Korean Peninsula, South Korea's Yonhap news agency said.
It the 11th time the Koreas have marched together at a global multi-sport competition, Yonhap added, and the first such occasion at an Asian Games since the 2007 Winter Asiad in Changchun, China.