This article endeavors to explain South Korea’s institutional turn to “diaspora engagement,” which began in earnest in the late 1990s. This shift can easily be attributed to instrumentalist calculations on the part of the South Korean state, i.e., as an effort to “tap into” or exploit the human and capital resources of ethnic Koreans living outside of the country. But instrumental calculations and interests, while significant and clearly proximate, were not the only nor necessarily the most important (causal) factors at play. Using a discursive institutional and microfoundational approach, we argue that underlying the institutional shift to diaspora engagement, was both an intentional and unintentional reframing of the Korean diaspora as “brethren” and “national assets,” a powerful discursive combination. This reframing did not come about automatically but was instead pushed forward by sentient or discursive agents, including Chŏng Chu-yŏng (the founder of Hyundai) and Yi Kwang-gyu, who was a Seoul National University professor and later the third president of the Overseas Koreans Foundation. Journalists, religious leaders and other activists within South Korea’s NGO community, as well as ethnic Koreans themselves, also played key roles as discursive agents in this reframing process. Central to our discursive institutional and microfoundational approach is the assertion that ideas and discourse were key causal factors in the institutional shift to South Korea’s engagement with the Korean diaspora.