This paper traces the role that US played in the development of Korean democracy and maintaining peace and security in the Korean peninsula. First, it looks back into the US role in the Korean political transformation from 1950s through 1980s. It examines why the US introduced American style democracy in the divided country and what was the role of the US in the critical junctures of regime changes and transformations. The United States had two contradictory objectives in South Korea: to build up South Korea as ‘a showcase for democracy’ and as an anti-communist buffer state. The two objectives set ‘the American boundary’ to South Korean democracy. The first objective acted upon as an enabling condition for incipient democracy, while the second acted upon as a confining condition to development of democracy in South Korea. Second, it investigates the role that the US played in the outbreak of financial crisis in 1987 and in the ensuing comprehensive neoliberal restructuring of the economy by the Kim Dae Jung government after the crisis. Third, it analyzes three events that put US-Korean relations under stress since the inauguration of Bush administration: Anti-Americanism, perception gap on North Korea, and the new military transformation initiative of US. Finally, it draws policy rationales for stronger Korea-US alliance in the future from the Korean perspective: Korea-US alliance as leverages against China and Japan, means of pursuing an effective engagement policy toward North Korea, a cornerstone to lift South Korea to a hub state in Northeast Asia, and geopolitical balancer and stabilizer in Northeast Asia after the unification of Korea.