The Winter Olympics have grabbed global spotlight not just because of the sport but also because of the diplomatic affinity between North Korea and South Korea shown during the games.
The ceremony was held at the PyeongChang Olympic Stadium in South Korea's eastern county of PyeongChang.
The Winter Games are being staged only 80km (50 miles) from the border with North Korea, which is technically still at war with the South since their 1950-1953 war ended in a truce rather than a peace treaty.
The two teams marched together at an Olympics opening ceremony for the first time since 2006.
North Korea's reclusive leader Kim Jong-un has asked South Korean President Moon Jae-in to visit Pyongyang at the "earliest date" possible for what will be a third inter-Korean summit, Kim's sister told the South Korean leader on Saturday. The two Koreas have since worked out the details and the North has sent not only athletes but also hundreds of other people as part of a cheering squad and an art troupe.
At the opening ceremony, he and Japanese Prime Minister, Shinzo Abe, sat as other leaders in the VIP box gave a standing ovation to the South and North Korean teams who were marching under a unified flag.
However, South Korea's main opposition party warned any talks between the two Koreas where the scrapping of North Korea's nuclear programme was not a precondition would only "benefit the enemy".
The delegation also includes Choe Hwi, chairman of the National Sports Guidance Committee, and Ri Son Gwon, chairman of the Committee for the Peaceful Reunification of the Fatherland.
Kim's special envoy, his sister Kim Yo Jong, delivered the verbal invitation during a lunch meeting with Moon at Seoul's Blue House, spokesman Kim Eui-kyeom said.
In 1991, Seoul and Pyongyang had formed a joint team for an worldwide table-tennis championship, and for a youth soccer tournament in 1991.