Koo Ja-cheol fired Korea ahead midway through the first half and Mile Jedinak headed Australia level midway through the second to clinch a draw that left both managers happy.
The two sides top Group C with four points from two matches ahead of India and Bahrain and both are virtually certain to go through to the quarter-finals next week.
Australia coach Holger Osieck was pleased with the way his team played.
"It doesn't matter to me whether we finish first or second in the group as long as we get into the last eight," he told reporters.
"It was a very good performance, especially the second half, and the only thing we need to improve is being more clinical in our finishing."
Korea coach Cho Kwang-rae said: "That was a great match for the fans to watch and it was a very good show from us but the result could have been better.
"Australia improved in the second half but I thought we handled them well and mainly controlled most of the game."
South Korea struck the first blow when Koo scored his third goal of the tournament, taking advantage of slack defending after 24 minutes.
Jedinak pulled Australia level with a header after 62 minutes, capitalising on the only mistake impressive Korean goalkeeper Jung Sung-ryong made when he failed to clear a cross.
Mark Schwarzer kept Australia in the match with a reflex point blank save from Ki Sung-yong after 87 minutes and a draw at the Al Gharafa Stadium was a fair result between the two tournament favourites.
SQUANDERED CHANCE
Australia only had themselves to blame for not striking the first blow early on when Harry Kewell, who scored against India in their opening match, squandered a much easier chance.
The ball fell to him when he was unmarked and well positioned in front of goal but he somehow sliced his effort high and wide over Sung-ryong's crossbar.
Korea, who have not been Asian champions since 1960, gave an indication of why they are strongly favoured to end that 51-year wait, with shaven-headed defender Cha Du-ri in outstanding form.
Man of the match Park Ji-sung played havoc with the Aussie defence and was ably assisted by midfielder Lee Chung-yong.
Korea were faster to the ball and sharper in their passing in the opening spell and it was no surprise when Koo fired them ahead.
The sleepy Australia defence failed to deal with a huge clearance from the keeper and Ji Dong-won set up Koo who fired wide to the right of Schwarzer.
Australia looked sharper after the break and gained their reward when Jedinak equalised.
The Korean defence was caught napping, failing to clear a Tim Cahill corner which led to Lucas Neill teeing up Jedinak's header with a lofted pass.
Both sets of fans in the 10,000 crowd observed a period of silence before kickoff for the victims of the Queensland floods while the Aussies sported messages on t
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