The group told fans during a televised dinner celebrating their anniversary that they would be pursuing solo projects.
Band member Jimin said the group had been going through a "rough patch".
"We're trying to find our identity and that's an exhausting and long process," he explained.
BTS made the announcement on Tuesday during their annual FESTA dinner, which saw the group reminisce and discuss the future.
Their whole conversation, which lasted more than an hour, was uploaded to their official YouTube channel.
An English translation showed one member calling the break a "hiatus" - but a representative for the band later disputed that.
"To be clear, they are not on hiatus but will take time to explore some solo projects at this time and remain active in various different formats," said Hybe, the entertainment company that manages BTS.
The FESTA dinner was scheduled to celebrate the founding of the Grammy-nominated group, which is made up of RM, Jungkook, Jin, Jimin, Suga, J-Hope and V.
During the conversation, RM said that while they had achieved a great deal as BTS, the individual members needed to grow and mature as individuals.
"I always thought that BTS was different from other groups, but the problem with K-pop and the whole idol system is that they don't give you time to mature," he said.
"You have to keep producing music and keep doing something."
The singer added that he now wanted to take the time to consider the future of BTS as a group and as individuals.