Kaesong is a small city and former capital of Koryo Dynasty (918 A.D. - 1392 A.D.). It is the only major city that changed hands between North and South Korea as a result of the Korean War. It is becoming increasingly well-known for the Kaesong Industrial Complex, a "special economic zone", developed by Hyundai Asan with North Korea. This zone now has over 10,000 North Korean workers in over a dozen brand-new factories owned by South Korean companies.
Kaesong is connected to Pyongyang by highway, about two and a half hours away. It is now (2007) connected to South Korea via road and rail through the DMZ, although these routes are not open freely but only to business, diplomatic and group tour traffic.
Formerly group tour buses running daily from Seoul were available through Hyundai-Asan, however this seems to have been stopped by North Korea in recent months, and it is unclear when/if they will become available again. As of August 2012, the tour is still unavailable. North Korea has been pushing for the tours to resume, but the current South Korean administration under Lee Myung-bak is holding back, hoping to get concessions from the North.
In April, 2013, North Korea severed the land link between South Korea and Kaesong in an escalation of tensions surrounding of the North's recent nuclear test and the resulting UN sanctions, as well as regularly-scheduled US/South Korean joint military exercises. It is unclear at this time when, or even if, the border crossing will be reopened.
It is forbidden to travel around the city without a tour guide.
Ancient temples and Koryo rulers' tombs.
Souvenirs such as ginseng, DPRK stamps, books written by Kim Il Sung and Kim Jung Il, and Korean handicrafts are available, and not expensive. Stores selling souvenirs accept US dollars, euros and Chinese yuan.
The majority of visitors are placed in the Kaesong Folk Hotel, which comprises traditional Korean houses and courtyards converted into a hotel. It has a small souvenir shop and restaurant. If you're not part of a tour group you might have the hotel all to yourself. It is located just a few blocks away from the Nam Gate.