Among the most important issues that will confront the new Trump administration is how to deal with North Korea. Before Mr. Trump leaves office, North Korea may achieve the capability of attacking the United States with nuclear weapons, a situation previous U.S. leaders have deemed unacceptable. President Trump’s policy needs to be based on a solid understanding of the complex and dangerous nature of the North Korea problem and the history of American involvement on the Korean Peninsula. To that end, the paper provides an unvarnished and unbiased assessment of American interests on the peninsula, past U.S. policy toward North Korea, and the current situation. It takes a fresh look at the critically important question of why North Korea’s leaders seek to be able to credibly threaten the United States with a nuclear attack. The paper also critically analyzes many of most debated aspects of North Korea policy—the military option, regime collapse, unification, sanctions, negotiations, nuclear freeze, military exercises, peace treaty, and human rights and humanitarian aid—and explains in specific terms why none is a panacea. Finally, the paper offers and explains realistic strategic and diplomatic policy recommendations for the new U.S. administration. It concludes that, despite the challenges, the United States can defend its interests on the Korean Peninsula.