Defense industrial cooperation between the United States and South Korea is deeply rooted in the bilateral security alliance and has evolved over time. The United States has prioritized allied cooperation and tapped into the appreciable national capacities and defense industrial bases of its allies and partners. Yet, the United States and South Korea have nuanced approaches to allied cooperation regarding the defense industry and related technology. For Washington, pursuing cooperation with South Korea and increasing cooperation among allies are important as means to realize its global strategy and win in strategic competition with adversaries. For Seoul, enhancing defense industrial cooperation with the United States is not only a means to deepen the alliance relationship but also an end in itself. Namely, Seoul seeks to strengthen its own defense industrial base and defense capabilities, which in totality determines competence. It anticipates reforming its defense industry base practices, lifting caps on existing methods of defense cooperation with the United States, and increasing access to the US market. The 2024 US National Defense Industrial Strategy (NDIS) aims to create a modernized defense ecosystem that harnesses cooperation among the government, industries, and their counterparts in ally and partner states. This is expected to have a significant impact on South Korea’s future defense and acquisition policy, as well as institutional arrangements. This paper reviews recent developments and identifies challenges in allied defense industrial cooperation to offer policy recommendations.