Psy's song 'Gangnam Style', which mocks the consumerism of a rich Seoul suburb, and hit horse-riding-style dance went viral on video-sharing website YouTube. It has been viewed more than 560 million times on YouTube since it was released in mid-July.
Admitting at first that he was "nervous", the UN Secretary-General relented and copied Psy's horse-riding style dance moves.
Psy was at the UN to discuss with Ban how they could work together to help global issues.
"I'm a bit jealous," Ban told reporters.
"Until two days ago someone told me I am the most famous Korean in the world. Now I have to relinquish."
Earlier, Ban Ki-moon had joked: "I was thinking about you when you were coming - you know we have tough negotiations in the United Nations. In such a case I was also thinking of playing the Gangnam Style dance so that everybody would stop and dance, maybe you can bring UN style."