It is seen as an important first step towards making the plant stable.
In a process due to take over a year, more than 1,500 tubes must be lifted out of a storage pool.
A spokesman for Tepco said they started lifting up a first fuel assembly with a crane at 15.18 local time, (06.18 GMT), on Monday afternoon.
A key question is whether the fuel rods were damaged during the disaster and may leak during removal.
Unit 4 of the plant was offline at the time of the earthquake and tsunami in March 2011.
Its core did not melt down as the other three did, but hydrogen explosions have since weakened the structure.
The first stage will see 22 of the 4.5 metre long tubes removed over two days and placed in a common pool with a cooling system.
The casks must remain watertight during the operation and have no contact with air.
An American expert taken on by the operator, Lake Barrett, said he was confident Tepco would do a good job.
But several other engineers, both Japanese and foreign, have warned that any errors during the process could have grave consequences, such as sudden leaks of radioactive material.
Tepco’s boss, Naomi Hirose, said at the beginning of last week that “safety was the priority”.
Meanwhile reports in Japan say Tepco is looking to shed 1,000 jobs through voluntary redundancies.
Copyright © 2013 euronews