This study examines the current status of North Korea's IT industry and the structural problems embedded in its IT sector. Although North Korea's IT industry, in general, is still in the infancy stage, North Korea has made considerable progress in the IT industry since the late 1990's. North Korea's recent achievement in the IT sector is largely attributed to the regime's emphasis on the fostering of human resources and favorable institutional arrangements to promote the software industry. Indeed, IT cooperation between two Koreas has been rapidly progressing in the recent years so as to lead the IT sector to become a driving force behind inter-Korean economic cooperation. However, North Korea is confronted with various problems in seizing the potential of the new industry and the path toward successful inter-Korean cooperation in the IT field is full of hurdles. This paper discusses the obstacles to North Korea's IT development and future tasks for promoting the IT industry. This study also illustrates major issues hindering inter-Korean IT cooperation, which is directly related to the question of how to accelerate IT cooperation.