Intercultural communication is a growing interest in the realm of global communication science and students pursuing degrees across the borders of nation-states. Nevertheless, the practice of intercultural communication does not always go effectively. This paper addresses problematics of intercultural communication occurred between Indonesian and South Korean students in Kyungsung University, Busan, largely nuanced by prejudice, stereotypes, ethnocentrism as well as values differences about social drinking culture, friendship, beauty, seniority, and perception on punctuality, which consequently trigger misunderstanding that leads to conflict. The goals of this study are twofold, namely, first, to gain deeper understanding on sources of intercultural communication conflict between Indonesian and South Korean students, secondly, to highlight the role of cultural competence to overcome conflict. The method of the research is case study with in-depth interview as the information gathering technique. The result will show that problems in intercultural communication are to a greater extent influenced by two inter-related attitudes which is cultural insensitivity and lack of cultural competence such as respect, socio linguistic awareness, deep cultural knowledge, and skills to listen and observe. The paper will also point to problem-solving alternative to reduce intercultural communication conflict both for Indonesian and South Korean students, namely to develop a more subtle approach when encountering religious-held beliefs with socially accepted norms. DOI: 10.5901/mjss.2016.v7n6p213