Colin Bell's side fought vailantly against the highest-ranked team in the competition but conceded late goals from Wi Jong Sim and Kim Ryu Song.
The result sees the Women's National Team finish fourth in the Cyprus Cup tournament, their highest-ever finish in Colin Bell's first four games as Head Coach.
Ireland were defensive throughout much of the contest as the dangerous Kim Phyong Hwa was denied by the post in the 9th minute and she was denied again by Emma Byrne with a fantastic diving save two minutes after the break.
Ireland had few chances as Katie McCabe's 20-yard effort sailed over the bar in the 51st minute before Stephanie Roche's central free-kick was easily saved with 30 minutes remaining.
North Korea continued to increase the pressure and with 15 minutes remaining, Wi Jong Sim's cross floated over Emma Byrne and into the top corner to give the Koreans the lead.
Five minutes from the end, with Ireland pushing forward, Kim Ryu Song found space and rifled an incredible 30-yard shot into the top right-hand corner to seal the game for the Koerans.
WNT Head Coach Colin Bell said: "It's a difficult result to take, we should have got something out of the game.
"We were always going to have to be defensive against a side who play the way they do but we did that brilliantly for 75 minutes. Both goals are preventable and the players know that.
"We can do better and even though, we've had a good tournament, I know the players can do more as we can continue to work with each other in the future.
"Once again, the players have put in a fantastic effort, like they have all week and the players can be really proud of what they've achieved as they've represented their country brilliantly this week.
"It gives me great hope for the future that the longer we work together, the more we can push this team forward to some real success."
Republic of Ireland: Byrne (GK), O'Gorman (Berrill 90), Caldwell, Quinn, Scott, Duggan, Roche (Shine 90), O'Sullivan (Murray 90), McCabe, Connolly, Kiernan (Littlejohn 85).
Substitutes Not Used: Hourihan (GK), McQuillan (GK), McCarthy, McLaughlin, O'Riordan.