The purpose of this paper is to analyze the role of the stock market in Korean Economy and to clarify forces which have caused various changes to Korean Stock Market. The study focuses on the analysis of the historical development in the stock market during the period of 1963 through 1971, which is believed to be of great help to understand the problems now facing the Korean Stock Market. Securities market is generally said to be one of the most essential features in free capitalists economy. Yet that does not hold true, in our economy; since the number of investors, the kinds and volume of securities traded in it the effectiveness of its economic function have been too poor. But in recent years since around 1970, the performance securities market is being improved. The securities market is moving toward the more close tie with both investors and business corporations than ever before. This change in the securities market has greatly influence the corporate financial, policies, especially its policies on the choice of the most economic sources of the required funds. Business enterprises begin to recognizes the availability and effectiveness of floatation of their stock and bond issues to finance their operations, which in turn, affects, the optimums corporate financial structure. The results of this study thus, can be summarized to the following conclusions; 1. The development of Korea securities market can be divied into three stages; 1) 1956-1961, the period of the government-issued bond transactions 2) 1962-1967, the period of transactions of one single kind of stock and gradual increase in transaction volume. 3) 1968-1971, the period of the rapid increase in corporate stocks and bonds listed in the securities exchange and the improved performance and function on the securities market. 2. Unless the preconditions which are essential for the existence of the securities market are met, any governgment policy over the financial market is likely to do more harm than good to the economy. 3. Although the role of the stock market in the economy to attract investors was not satisfactory in the 1960`s stock dividends most of which were made possible on account of the development of continuous inflation have done a great help to increase the volume of transaction both in new issuance and trade of stocks. 4. Despite the efforts and policies of the government to distribute the corporate ownership to as many people as posible, the result has been proved to be unsatisfactory. But, recent development shows increasing number of stock owners in our society. 5. The most important forces causing the development of Korea stock market are believed to be the changes investment environment such as change, in prime, interest rate of bank loans, inflation, or depression and government regulations on real estate trainactions. In general the boost in stock market has been a result of the government policies to curtail other investment opportunities. 6. Though the recognition of the importance of the stock market in the society on the parts of both corporations and investors has been greated improved, their market behavior still stays in primitive stage. Their decisions are made based more on unstructured personal judgement than on sophisticated economic consideration or scientific analysis of relevant data. 7. Various government efforts and policies have helped to improve the function of the stock market. But the government policy in which too much privilege is given to the listed corporations is likely to bring about disguised split of corporation ownerships. It is not believed to be an effective solution to the problems faced with the stock market.