This paper examines the recent challenges of cultural diversity in the Republic of Korea and predicts possible developments in the future. I explain the current stage of development in the Korean society towards multiculturalism through a three‐stage framework: tolerance, legalization of non‐discrimination, and multiculturalism. Each stage of development will be analysed through several sub measures. To better understand Korea’s unique situation, I also contrast two different perspectives, namely, state top‐down and society bottom‐up explanations. I will counter the claim of the state‐initiated instrumental multiculturalism thesis that assumes a proactive Korean government’s initiative to control immigration and adopt multicultural policy as a strategy to compensate for a labour shortage. This paper will instead argue from the liberal democracy thesis. Democratization in Korea has confirmed the relevance of liberal democracy thesis, which presupposes two conditions: the increasing demand for cultural rights by minorities and liberal constitutional government’s inevitable acceptance of such demands. Unlike the claim of state‐initiated instrumental multiculturalism, strong voices of NGOs in civil society since the mid‐1990s have influenced the development of a multiculturalism friendly atmosphere. The Korean government has also been under the pressure of political correctness toward the inevitable acceptance of cultural diversity with the deepening of democratic consolidation as well as globalization.