This paper examines the transformation of KIST(Korea Institute of Science and Technology) from its early beginning till its merger with KAIS(Korea Advanced Institute of Science) in 1981, inquiring into its R&D activities. KIST was initially set up as a contract research institute in 1966. The Contract research system of KIST had two objectives. One objective was to reform the natural features regarding R&D of Korea, and the other one was to accomplish its financial independence from the government. KIST could obtain some of good results for the former objective. However KIST was transformed to a national project institute in 1978, it failed to accomplish the latter objective. The conversion meant the increase in the dependence on government endowment, and that KIST became highly susceptible to the change of the government policy and the political power. In the end, KIST was merged with KAIS soon after the death of president Park Chung-Hee, a KIST's absolute guardian.