The government-led development of South Korea's government bond market after the Asian financial crisis provides a case study for building local bond markets in Asia. Two steps considered particularly effective at enhancing the liquidity of the market were the reopening system and the mandatory electronic exchange trading system for benchmark issues. This study uses the micro bondtrading data of the Korea Stock Exchange to determine how these efforts enhanced the government bond market. It also analyzes a long-term challenge: with the fiscal deficit projected to return to balance, the supply of outstanding government bonds is likely to decline, reducing the overall supply of benchmark issues.