One of the more significant examples of the implementation of containment was United States intervention in the Korean War. In June 1950, after years of mutual hostilities, Kim Il-sung's North Korean People's Army invaded South Korea at the 38th parallel. Stalin had been reluctant to support the invasion but ultimately sent advisers. To Stalin's surprise, the United Nations Security Council Resolution 82 and 83 backed the defense of South Korea, although the Soviets were then boycotting meetings in protest of the fact that Taiwan, not the People's Republic of China, held a permanent seat on the council. A UN force of sixteen countries faced North Korea, although 40 percent of troops were South Korean, and about 50 percent were from the United States.

The US initially seemed to follow containment when it first entered the war. This directed the US's action to only push back North Korea across the 38th Parallel and restore South Korea's sovereignty while allowing North Korea's survival as a state. However, the success of the Inchon landing inspired the US/UN forces to pursue a rollback strategy instead and to overthrow communist North Korea, thereby allowing nationwide elections under U.N. auspices. General Douglas MacArthur then advanced across the 38th Parallel into North Korea. The Chinese, fearful of a possible US invasion, sent in a large army and defeated the U.N. forces, pushing them back below the 38th parallel. Truman publicly hinted that he might use his "ace in the hole" of the atomic bomb, but Mao was unmoved. The episode was used to support the wisdom of the containment doctrine as opposed to rollback. The Communists were later pushed to roughly around the original border, with minimal changes. Among other effects, the Korean War galvanised NATO to develop a military structure. Public opinion in countries involved, such as Great Britain, was divided for and against the war.

After the Armistice was approved in July 1953, North Korean leader Kim Il Sung created a highly centralized, totalitarian dictatorship that accorded his family unlimited power while generating a pervasive cult of personality. In the South, the American-backed dictator Syngman Rhee ran a violently anti-communist and authoritarian regime. While Rhee was overthrown in 1960, South Korea continued to be ruled by a military government of former Japanese collaborators until the re-establishment of a multi-party system in the late 1980s.