Japan had complained to South Korea about fans waving the flag at a women's ice hockey game last month between the combined North and South Korean team and Sweden.
It will be the largest Winter Paralympics ever, with 570 athletes competing for 49 nations.
Despite the rift, South Korea's Yonhap News Agency reported that the North Koreans were cheered when they entered the arena at the Paralympics opening ceremony on Friday.
At the summer Games achievements of Ukrainian Paralympic athletes are even more impressive: in Atlanta-1996, Sydney-2000, Athens 2004, Beijing 2008, London 2012 and Rio de Janeiro in 2016 "blue-yellow" team won the 374 medals (125, 115, 134)!
Google is celebrating the commencement of the Winter Paralympics in PyeongChang city of South Korea with a special doodle.
"From tomorrow, Paralympic athletes will turn their dreams into reality".
There were also golds for Ukraine, with Vitaliy Lukyanenko winning in the men's vision-impaired biathlon, and Canada, with Mac Marcoux clinching victory in the men's vision-impaired downhill skiing.
As well as North Korea, Georgia and Tajikistan are taking part for the first time in the nine-day Games. Ultimately, the International Paralympic Committee (IPC) decided that it did not want any further debate on the matter and suggested the two Koreas march separately at the Opening Ceremony. She shared the podium with Russians Katerina Rumyantseva and Anna Milenin, who are performing as neutral paralympic athletes after Russia was barred from flying its flag at the Winter Games for systematic, state-organize drugs cheating.
Kim Jong Hyon carries the flag of North Korea as he leads his teammates into the opening ceremony.
But the disagreement is considered a minor sticking point after what has been a swift thaw between the neighbours, starting with North Korea's decision in January to participate in the Olympics.