The Democratic People's Republic of Korea participated in the 2012 Summer Olympics in London with 51 athletes. They won a total of six medals and finished 20th in the overall medal table. However, most observers of the London 2012 Olympics will not remember North Korea's athletic successes but the flag blunder that kicked the Games off with a diplomatic row. On the first day, the South Korean flag was accidentally displayed next to the faces of the North Korean women's football team on the stadium's huge screen. Although there have been several flag controversies and blunders in the context of the Olympic Games, this incident must be considered as one of the most embarrassing and high-profile as, technically, North and South Korea are still at war having signed only an armistice at the end of the Korean War in 1953. This paper deals with three interrelated issues: first, it outlines the development of inter-Korean political and sporting relations since the 2008 Beijing Olympics before, second, it focuses on the political significance of the 2012 London Games. Third, it summarises key themes and ideological messages emerging from a qualitative analysis of the state-controlled North Korean media coverage of the 2012 Olympics. The Korean Central News Agency appears to pursue a dual strategy: it aims to increase the popularity of outstanding North Korean athletes and create home-grown stars, and also attempts to encourage an alternative discourse about the country abroad. All these issues need to be analysed in wider context of significant political changes in both Koreas, particularly in the North, where Kim Jong-un, who came to power in December 2011, has started to carve out a distinct identity and forge his own leadership style.