North Korea remains the ultimate international outlier: an isolated totalitarian state seeking to acquire a credible nuclear weapons program. As such, a simmering crisis between the North and the US has been playing out since the end of the Cold War. Yet, while past attempts at diplomacy have failed, change is afoot as the Trump administration seeks to shift US-North Korean relations onto a new footing. While skepticism is warranted, this article explains that new personalities and a shift in the structure of power in and around the Korean peninsula provide grounds for cautious optimism that long-term rapprochement is feasible. Small states like New Zealand have a stake in a positive outcome, as its interests dictate that it seeks a stable and secure Asia-Pacific. Furthermore, US-North Korean negotiations take place against the backdrop of intensifying US-China great power competition; a situation that complicates the picture and suggests that long-term peace on the peninsula is only possible if diplomacy takes into account all regional actors. With the above in mind, this article makes a contribution to our understanding of the North Korean issue. It provides a background to the crisis; outlines how personal and structural changes (in terms of the shifting balance of power) suggest that the outcome of diplomatic efforts could be different to failures of the past; considers whether North Korea is an ‘irrational’ actor; and offers a conceptual (and self-avowedly idealistic) framework – ‘strategic liberalism’ – to act as a guide for New Zealand as it looks to calibrate its approach to ongoing tensions and diplomacy on the Korean peninsula.