North Korea's withdrawal could trigger further defections from the treaty, and, in particular, could set a precedent for other states, including Iran. In addition, North Korea's action could provoke other states in the region to pursue nuclear weapons of their own. An additional concern is the potential for North Korea to sell weapons-grade fissile material or nuclear weapons itself to other states and non-state actors, including terrorist groups.

Of more concern is that North Korea continues to be in non-compliance with its IAEA safeguards obligations and refused to open all its nuclear facilities for IAEA inspection even before its withdrawal from the treaty. Since 1993, the IAEA has been unable to fully implement its comprehensive safeguards agreement with North Korea. In October 2002, during a meeting with U.S. Assistant Secretary of State James Kelly, North Korean officials acknowledged the country had a secret development program to produce enriched uranium. In December 2002, North Korea disrupted IAEA safeguards measures at the Yongbyon facilities, and on December 31, 2002, all IAEA inspectors were expelled. In February 2003, the IAEA Board of Governors decided to refer the North Korean issue to the UN Security Council. In April 2003, the UN Security Council expressed its "concern" over the situation in North Korea and said it will keep following developments. The Security Council has, however, not taken further action. The IAEA continues to call for North Korea to promptly accept comprehensive IAEA safeguards and cooperation with the IAEA in their full and effective implementation.

On October 3, 2006, the North Korean Foreign Ministry delivered a “clarification statement” declaring Pyongyang’s intention to conduct a nuclear test. Less than a week after the statement was given, on October 9, 2006, North Korea tested its first nuclear device. Because the test did not produce a significant yield, some experts do not consider the event to have been a nuclear explosion.

In reaction to the test, the UN Security Council placed sanctions on North Korea, Resolution 1718. The resolution demanded that North Korea refrain from further nuclear and ballistic missile tests, cease nuclear weapons related activities, reverse its intended withdrawal from the NPT, and accept IAEA safeguards. The resolution placed an embargo on the trade of luxury goods to North Korea, while banning the transfer of conventional, defense-related items to North Korea, including missiles, combat aircraft, and tanks. Resolution 1718 also banned the sale or transfer of items that could help North Korea build weapons of mass destruction.

Efforts to resolve the crisis peacefully and diplomatically have been made through the Six-Party talks since August 2003 involving the Republic of Korea, China, Japan, Russia and the United States. While the Six-Party Talks process often stalled, progress has been made to some extent. After boycotting the fourth round of the talks in the fall of 2004, in February 2005, North Korea announced that it was indefinitely suspending its participation in the talks. In the same statement, North Korea openly declared that it possesses nuclear weapons. In July 2005, North Korea announced its intentions to rejoin the Six Party Talks. After nearly two years of impasse, a “statement of principles” was agreed on by all parties at the conclusion of the fourth round of talks in mid-September, 2005. The statement included a commitment by North Korea to “abandon all nuclear weapons” and “to return, at an early date, to the NPT.” However, North Korea insisted that the dismantlement of its nuclear program be contingent upon receiving a light water reactor, which caused another stalemate. The fifth round of six-party talks started in November 2005. However, significant progress was not made and negotiations were suspended during most of the next year while North Korea conducted ballistic missile tests in July 2006, and tested a nuclear device in October. The talks resumed in December 2006, although progress was not made towards the implementation of the September 2005 “statement of principles” at that time.

On February 13, 2007, in the most successful round of the Six-Party Talks (in part due to a shift in U.S. policy), North Korea agreed to an “Action Plan” based on the 2005 “Statement of Principles.” Under the deal North Korea would shut down its nuclear facilities at Yongbyon within 60 days in exchange for 50,000 tons of heavy-fuel aid. Separate bilateral talks with the United States and Japan would also begin in order to normalize relations. In the Action Plan’s second phase, if North Korea dismantles its nuclear weapons program completely, another 950,000 tons of heavy fuel oil will be delivered along with other humanitarian, economic, and energy aid. On March 19, 2007, the freeze on assets in Banco Delta Asia was lifted and on July 14, North Korea re-admitted IAEA inspectors. The inspectors verified that indeed the Yongbyon nuclear facility had been shut down.

On October 3, 2007, at the sixth round of the Six-Party Talks, parties reached an agreement to disable North Korea’s nuclear program before the end of 2007. The disablement of North Korea’s nuclear facilities did begin in November 2007; however, the entire program was not disabled by the end of that year. U.S. State Department officials announced that North Korea had missed the deadline due to confusion surrounding how to cool nuclear fuel rods. On January 4, 2008, North Korean officials stated that, because foreign energy assistance was not forthcoming, they would slow down the dismantlement of their nuclear facilities.

In March and April 2008, U.S. and North Korean diplomats met to discuss a compromise agreement to North Korea’s declaration of its nuclear activities. On April 8, 2008, officials agreed that North Korea would make a declaration regarding its plutonium-based nuclear weapons activities, and comment on its suspected uranium enrichment program.

On April 24, 2008, a U.S. intelligence briefing concluded that North Korea helped build the Syrian nuclear reactor destroyed in a September 2007 air strike by Israel. In an official press conference, U.S. President George W. Bush stated that the U.S. government disclosed information regarding North Korea’s assistance with the unfinished Syrian nuclear reactor to compel North Korea to disclose all of its nuclear activities.

In early May 2008, North Korea gave U.S. State Department officials approximately 18,000 pages of documents relating to its nuclear weapons activities at Yongbyon. The United States responded to North Korea’s sharing of documents by removing the country from its list of state-sponsors of terrorism. Then, on June 27, 2008, North Korea demolished its 60-foot cooling tower, destroying a visual representation of its plutonium-based nuclear complex at Yongbyon. Experts argue that this move symbolized North Korea’s commitment to dismantling its nuclear complex.

Six Party talks resumed in July 2008 for the first time in more than nine months. On July 12, representatives from the six countries agreed on a blueprint for verifying the dismantlement of North Korea’s nuclear weapons program. North Korea also agreed to let on-site inspectors verify the dismantlement process at its nuclear facilities. As of late July 2008, details of the verification process were still being debated. Negotiators set a new target for completing the dismantlement, pledging to finish dismantling the nuclear facilities at Yongbyon by the end of October 2008.