Japan scrambled fighter jets after a Y-9 surveillance plane "violated the territorial airspace" of Danjo islands at 11:29 local time Monday (02:29 GMT).
Japan's Chief Cabinet Secretary called the breach "utterly unacceptable" and summoned a Chinese embassy official in Tokyo in protest.
The incident comes as tensions rise in the region, where China competes for influence against the US and its allies, including Japan.
There has been no official response from Beijing.
The incursion on Monday lasted two minutes and the Japanese issued "notifications and warnings" to the Chinese aircraft. No weapons such as flare guns were used, according to broadcaster NHK.
Japan has also recently flagged the presence of Chinese ships in the Senkaku islands in the East China Sea, which is claimed by China and which Beijing calls the Diaoyus.
China has become increasingly assertive in the region, in its claims over Taiwan as well as the South China Sea.
Additional reporting by Chika Nakayama in Tokyo
Joel Guinto