This study explicates interactional usage of Korean demonstratives, ku (medial) and ce (distal), in naturally occurring conversation. It elucidates the relationships between the various interactional functions and lexical categorie of ku and ce (e.g., adnominal vs. pronominal form) and the differences between ku and ce in terms of their forms and functions. The analysis shows that the interactional functions of the two demonstratives vary depending on the morphosyntactic categories of each form.