This study aims to investigate phonetic realization of ‘늬’ (/n?y/) in Korean. Does ‘늬’ (/n?y/) surface [ni] or [?i] in Modern Korean? The ‘ㄴ’of ‘늬’(/n?y/) has been claimed to be different from the ‘ㄴ’of ‘니’(/ni/) in that the former does not undergo palatalization but the latter does. However, many studies suggested that the ‘ㄴ’of ‘늬’(/n?y/) also surfaces as palatalized [?] after [?y] turns to a monophthong, [i]. This study conducts two production experiments. The first experiment is to find the acoustic cues to distinguish between the palatalized [?] and non-palatalized [n]. The second experiment is to investigate whether the ‘ㄴ’of ‘늬’ (/n?y/) is palatalized. Two results were found. First, F1 and F2 are crucial acoustic cues in determining whether /n/ undergoes palatalization. Second, ‘늬’ (/n?y/) is pronounced as [?i] not [ni] and no longer an exception to palatalization. These findings will be discussed in light of sound change comparing the rule ordering analysis in Generative Phonology and the constraint reranking-based analysis within the Optimality Theoretic framework.