In July 1951, all the sides to the Korean War sought a ceasefire. For a ceasefire, the Allied and Communist forces began to hold talks at Naebongjang, located northeast of Kaesong. However, they only sharply opposed each other and didn't make progress in the negotiation. In October 1951, the two sides met again in the small village of Neolmun-ri below Gaeseong. They set up tents there to negotiate and named the place Panmunjom. The name Panmunjeom is a combination word of Panmun, meaning Neulmun-ri, and “Jom,” of an inn.

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