This paper examined the phenomenon of declining dividends around the financial crisis for firms listed on the Korea Exchange from 1982 to 2010, and analyzed whether the dividend policy of Korean firms can be explained by the life-cycle theory. The empirical results of this paper are as follows. First, the proportion of dividend-paying firms among total firms—the dividend payer ratio—decreased around the financial crisis. Second, dividend-paying firms, compared to non-dividend-paying firms, exhibited relatively higher profitability (PA), life-cycle stage (RTE), and cash holding ratios (Cash), while having lower investment opportunities. Third, according to logit analysis controlling for dividend-related factors, the life-cycle variable had a statistically significant positive relationship with the predicted probability of dividend payment, indicating that the dividend policy of Korean firms can be explained by the life-cycle hypothesis. Meanwhile, dividend catering had only a weak relationship with the predicted probability of dividend payment. Fourth, when constructing a total of 27 portfolios based on firm profitability, growth opportunities, firm size, and life-cycle stage, the predicted probability of dividend payment for the group with the largest firm size, highest profitability, lowest growth opportunities, and highest life-cycle stage was more than 30% higher than that of the group with the largest firm size, lowest profitability, highest growth opportunities, and highest life-cycle stage. Fifth, the results of the logit analysis around the financial crisis also confirmed that the life-cycle variable is a key factor explaining the dividend policy of Korean firms.