In spite of the intermittent serious clashes between South and North Korea, few scholars have paid attention to the Armistice Agreement and the system it put in place since its conclusion in 1953. This paper argues that the Armistice Agreement produced a security system, which will be called the “Armistice System,” which needs to be clarified in order to illuminate the structural and fundamental causes of two incidents that took place in 2010, the sinking of the Cheonan corvette and the shelling of Yeonpyeong island. Especially, we have to pay attention to the following questions: what are the basic characteristics of the agreement; what has changed in the agreement and the system since 1953; and why have military conflicts continued to erupt under the system, which prohibits hostility on the peninsula? Through a historical analysis, this paper has uncovered several crucial problems and loopholes in the agreement and the system. First of all, it has failed to put an absolute end to hostilities and does not guarantee permanent peace due to the lack of a final settlement. Although the Military Armistice Commission (MAC) and the Neutral Nations Supervisory Commission (NNSC) were organized based on the agreement in order to block the escalation of clashes, neither of them has been operating since early 1994. Second, the armistice has a crucial defect: there is no agreed demarcation line on the sea. The areas where the 2010 incidents occurred are claimed by both North and South Korea as their own maritime territory. These kinds of incidents did not occur for the first time in 2010. There were two naval clashes in 1999 and 2002, and before that, in the 1960s and 1970s there were major incidents: the sinking of patrol vessel no. 56 in 1967, the Pueblo Incident in 1968, and the sinking of patrol boat no. 863 in 1974. Finally, another critical problem in the armistice is derived from the invalidation of some paragraphs in the Armistice Agreement. Paragraph 13 (d), prohibiting the importation of upgraded weapons from outside was declared null and void in 1956 and nuclear weapons were introduced to South Korea in 1958, which might be at the origin of the nuclear problem in North Korea.