A U.S. embassy was not again established in Korea until the end of World War II, after the Allied forces defeated the Japanese.

The chancery (on the 5th floor of Hotel Bando) was retaken September 26 that year, by Easy Company of 2nd Battalion, 1st Marine Regiment, acting as a United Nations force.

The current chancery building was built in 1962 and was initially an office for the United States Agency for International Development (USAID).

It is on the main street leading to the Gyeongbokgung and directly next to several major Korean government agency buildings.

Attempts at building a new Chancery have been in the plans since about 1980, but funding issues by the United States Congress, botched negotiations with the South Korean government, and political wrangling between the U.S. and South Korean governments over an appropriate site, have led to the lengthy delay in a new Chancery.

This was encouraged by the South Korean government at the time, with the idea that this site would be the home to a new Chancery building.

Full efforts to build there by the Americans were rebuffed by recently empowered local community groups who believed that construction at that site would disturb buried archaeological evidence, would overshadow the nearby Deoksugung and ruin the aesthetics of the neighborhood.

Current plans call for a new Chancery to be built on land to be relinquished by the U.S. Army leaving the Yongsan Garrison south of downtown Seoul, but still north of the Han River.

The U.S. Embassy in Seoul has traditionally played a key and prominent role in South Korea politics.

Whenever a controversial issue crops up involving the U.S. presence in Korea, a demonstration will almost invariably occur at the U.S. Embassy.