The UN said the “extraordinary” exodus had caused “incredible suffering”.
Tens of thousands of people are being housed in camps south of the main fighting zone in the Swat valley.
Pakistan’s army began an offensive on 2 May against the Taliban after a peace deal broke down and militants began spreading their area of influence.
Separately, the top US military commander, Adm Michael Mullen, has warned that the US troop build-up in Afghanistan could push Taliban fighters deeper into Pakistan, further destabilising it.
The UN said the $543m (£342m) was needed to help fund about 165 projects it had drawn up to help between 1.6 million and 1.7 million displaced people.
Martin Mogwanja, acting UN humanitarian coordinator, said: “The scale of this displacement is extraordinary in terms of size and speed and has caused incredible suffering.
“We are calling for generous support from the international community.”
The UN said it was working with authorities to “ensure we get relief to people as quickly as possible”.
On Thursday, Pakistani Prime Minister Yusuf Raza Gilani chaired a donor conference in Islamabad and officials said the international community had so far responded with pledges of $224m. It is not clear if that is included in the latest UN target figure.
Mr Gilani said: “There is an urgent need for a joint and comprehensive response to this issue by all those who are committed to fighting terrorism. We need to do something concrete and visible.”
In Swat, the army says that about 15,000 members of the security forces are fighting between 4,000 and 5,000 militants.
It says more than 1,000 militants and more than 50 soldiers have been killed.
It remains difficult to confirm reports from the war zone but the Dawn newspaper says that troops are advancing on a key bridge near Mingora, the main city of Swat.
In another area of North West Frontier Province on Thursday night, at least four people were killed and 46 injured, including 25 security personnel, when an explosives laden truck blew up in Jandola, near Tank in the south of the province.
Meanwhile Adm Mullen admitted to the Senate Foreign Relations Committee in Washington that successes against the Taliban in Afghanistan could push militants further into Pakistan.
“Can I… [be] 100% certain that won’t destabilise Pakistan? I don’t know the answer to that,” he said.
However, Adm Mullen said US and Pakistani forces were planning measures to prevent this, without giving further details.
Adm Mullen’s comments come as US President Barack Obama’s administration prepares to send thousands of extra troops to Afghanistan.