One of the contemporary theological issues that the Korean church is facing in the 21st century is a lack of understanding its spiritual identity indicated both in the Scripture and in the Covenant theology. It has brought about the secularization of the church and hence resulted in both stagnation in the church growth and social antipathy toward Christianity. This study emphasized the validity and necessity of the Reformed Covenant theology in order to readdress the true identity of the Korean church and to challenge the church to move on to the next phase of its mission. To begin with, an etymological understanding of various Scriptural terms was defined to discern its theological implications. Then the types and the concepts of God's grace in the Bible were discussed in detail. To persuade that the Reformed theology is rooted in the Bible, John Calvin’s perspective of Covenant theology was discussed in length and the Westminster Confession of Faith was considered in depth. Believer’s identity, privileges and responsibilities were confirmed through metaphoric examples from the Biblical point of view. An effort to focus and touch the major concern of the Korean church in the 21st century was made in the process of comparative study of modern theology, and its theological issues and crisis were reviewed. In conclusion, the Korean church's lack of understanding its Christian identity as a covenant people can be overcome through a full understanding of the Covenant theology rooted in the Reformed tradition. In this way, the Korean church may be recovered from its identity confusion and be blessed with many spiritual gifts to breakthrough the trend of theological secularization.