The quarrel, over last month's killing of Kim Jong-nam in Kuala Lumpur, had resulted in both countries banning each other's citizens from leaving.
Malaysia has also allowed North Koreans to leave and released Mr Kim's body.
There is widespread suspicion that Pyongyang was responsible for orchestrating Mr Kim's murder.
Mr Kim was the half-brother of North Korean leader Kim Jong-un. The late Kim Jong-il's eldest son is thought to have fled North Korea after being passed over for the leadership.
The nine Malaysian nationals were met by their relatives and a large media contingent at Kuala Lumpur airport early on Friday.
Malaysia's foreign minister Anifan Aman (centre, in dark pink coat) received the returning Malaysians at Kuala Lumpur's airport
Those who have returned include the country's counsellor to North Korea, Mohd Nor Azrin Md Zain, embassy staff, and their families.
The counsellor said that when Pyongyang told them they could not leave North Korea, "we were very concerned especially since we had committed no wrong".
But he added they were "not particularly harassed" by North Korean authorities. "We were given the assurance that life could go on as normal," he said.
They were flown home in a business jet plane piloted by members of the Malaysian air force.
What was the spat about?
Following Mr Kim's killing on 13 February, North Korean officials demanded that the body be handed to them immediately without an autopsy.
Pyongyang reacted angrily when Malaysia refused their requests.
Malaysian authorities said they had the right to conduct an autopsy as he had been killed on Malaysian soil, and said they would only release the body to Mr Kim's family.
Mr Kim was the half-brother of North Korean leader Kim Jong-un
This prompted a war of words where North Korea's ambassador Kang Chol accused Malaysia of colluding with "hostile forces", allegations which Kuala Lumpur dubbed as "delusions, lies and half-truths".
Kang Chol was expelled and the Malaysian ambassador to North Korea was also recalled.
Pyongyang then said it would ban all Malaysians in North Korea from leaving until the "situation was resolved", which Malaysia's Prime Minister Najib Razak called an "abhorrent act" that effectively held his citizens hostage.
Kuala Lumpur enacted a tit-for-tat exit ban on North Koreans.
How was it resolved?
Malaysian officials have not hesitated in branding the return of their citizens as a triumph of diplomatic deal-making.
On Friday morning Malaysian Foreign Minister Anifah Aman told reporters: "There can be no substitute for diplomacy, for level-headedness in dealing with such situations, and this has served Malaysia well in this instance."
But the exact circumstances of how the deal was struck remain unclear.
The BBC's South East Asia correspondent Jonathan Head says that Malaysia appears to have acceded to North Korea's wishes to get the Malaysians released.
Mr Najib had said earlier that, after challenging negotiations, all North Koreans would be allowed to leave Malaysia - which probably includes North Korean suspects in the murder who are wanted by Malaysian police.
What's happened to the body?
Mr Kim's body was released to North Korea and flown to Beijing early on Friday, where North Korean officials are expected to receive it.
North Korean and Chinese officials were seen at Beijing airport after the plane carrying Mr Kim's body landed early on Friday
Malaysia had previously said they would not release the body until a request came from family members.
On Thursday, Mr Najib said a formal request had been received from the family, but did not give further details. It is not known who exactly requested for the body.
Mr Kim's own family previously lived in Macau but they are now thought to be in hiding.
His son Kim Han-sol appeared in a video earlier this month confirming he was with his mother and sister at an unspecified location.