The Korea Advanced Institute of Science and Technology came second in the 2014 Asian University Rankings compiled by Quacquarelli Symonds and the Chosun Ilbo.
This is the highest placement ever achieved by a Korean university since the rankings were compiled for the first time in 2009.
The National University of Singapore topped the list, and Korea's Seoul National University came fourth.
Other Korean universities in the top 20 are Pohang University of Science and Technology in ninth, Yonsei in 16th, Sungkyunkwan in 17th and Korea in 18th.
Sungkyunkwan was newly added this year to five universities last year. In 2009, three universities were in the top 20.
In its sixth year, the Asian University Rankings evaluated 491 universities in 17 countries.
Korea's technology and engineering-centered universities performed strongly this year. KAIST was ranked seventh in 2012 and sixth in 2013 but this year overtook Hong Kong University of Science and Technology and Nanyang Technological University in Singapore to become Asia's best technological university.
SNU has been in fourth place for three years in a row.