This thesis examines determinants of Korean swap spreads and U.S. swap spreads by factors. The level, volatility, slope of the zero-coupon government yield curve, the spread between CD91 (Libor) and 3month Treasury rates and corporate bond yield are used as factors. The results show that the level of short term interest rate and term structure slope are more significant for 3-year, 5-year and 7-year Korean swap spreads and liquidity factor (CD91-3month Government bond yield) has a negative impact on swap spreads for all maturities. Also the term structure slope has a positive effect for 5-year and 7-year swap spreads and a negative effect for 3-year swap spread. For U.S., swap spreads of all maturities are influenced by the term structure slope. Also examination of the links between Korean swap market and U.S. swap market shows that U.S. term structure slope has an effect on Korean swap market, but in U.S. swap spread, non of Korean factors are more significant than U.S. factors.