The wrist-worn device has sensors that monitor pulse rate, measure calorie burn and track sleep quality, Microsoft said in a blog post.
Microsoft said the device will be available in the United States in limited quantities from Thursday for $199.
Apple Inc unveiled a smart watch on Sept. 9 that will combine health and fitness tracking with communications and will go on sale in early 2015, while Samsung Electronics Co unveiled its Galaxy Gear smart watch in September 2013. The Apple Watch will be priced at $349.
Microsoft also launched a health app called Microsoft Health that includes a cloud service for users to store and combine health and fitness data.
The Microsoft Health app will collect data from the fitness band and will work on iPhones and Android smartphones, as well as its own Windows Phone.