This study investigates the effect of international diversification of Korean corporations on analysts' forecasting activities, specifically focusing on earnings forecast accuracy, optimism and dispersion. Prior research indicates that analysts suffer from the complexity and difficulty in forecasting earnings of internationally diversified firms due to differences in political,economic, and cultural environment. It also reports that analysts' forecast for firms with high uncertainty tends to be optimistically biased. Thus, this study tests the hypothesis that analysts' forecast becomes less accurate, and optimism and dispersion among analysts increase with the degree of diversification. The sample for the empirical test includes 2,371 firm-years for firms listed in the Korean Stock Exchange or KOSDAQ for the period of 2000-2010 and the analysts' earnings forecast data provided by FN Data Guide Pro database. When we use the analysts' forecast of annual earnings-per-share (EPS) within the twelve month period up to the earnings announcement (i.e., from the end of March in the current year to the end of March in the following year), the empirical results show that, consistent with the expectation, analysts' forecast accuracy decreases significantly while optimism and dispersion among analysts increase significantly with the degree of diversification. The result represents that international diversification of Korean firms increases the complexity and difficulties of analysts' forecasting activities, suggesting that international diversification should be considered as one of the significant factors determining analysts' forecasting activities. On the other hand, when the data within one month up to the earnings announcement is used, we find that the above mentioned effects decreased significantly. Consistent with Richardson et al. (2004), this evidence suggests that financial analysts “walk down” their earnings forecasts,issuing initial optimistic forecasts, followed by more pessimistic forecasts immediately before the earnings announcement. This allows prediction error to be reduced. This study documents the effect of international diversification of Korean corporations on analysts' forecasting activities. The findings in this study provide several valuable implications to regulators, researchers and investors. First, when investors or users of accounting information use analysts' earnings forecasts as a proxy for the valuation of internationally diversified firms,they should consider the analysts’ earnings forecasts may be less accurate and more optimistically biased. Second, Regulators need to mandate “Geographic or Country Business Segment Report”with the current “Business Segment Report” disclosure practice. We expect that this disclosure practices will improve analyst' earnings forecasting attributes for the internationally diversified firms. Also, it will provide useful information for investors when they invest in those firms. The improved disclosure practice will enable researchers to study the effect of international diversification of Korean corporations in more detail, and ultimately will contribute to increase transparency in accounting for such firms.