This paper investigated the optimal conditions for coffee extraction and dilution by comparing differences in soluble compounds and sensory characteristics of coffee subjected to cold-water extraction according to water quantity and dilution ratio. For sample preparation, we extracted coffee for 3 to 10 hours by adding 400 mL, 600 mL, 1,000 mL and 1,800 mL of cold water ($20^{circ}C$) to 100 g of ground coffee, resulting in 200 mL, 400 mL, 800 mL and 1,600 mL portions of extracted coffee, respectively. Following this, the 200 mL, 400 mL and 800 mL portions of extracted coffee were further diluted with 1,400 mL, 1,200 mL and 800 mL of cold water, resulting in ratios of coffee to cold water of 1:7, 1:3 and 1:1, respectively. The 1,600 mL of portion of extracted coffee was not diluted and used as a sample. Undiluted coffee showed the highest values for pH, acidity, reducing sugar, total soluble solids and total phenolic compounds among all sample coffees, whereas the highly diluted coffee with a high ratio of 1:7 showed the lowest values. In a descriptive test, odor, sourness, bitterness and body intensity were also the highest in undiluted coffee due to the overly extracted coffee compounds. Undiluted coffee showed the lowest preference in terms of aroma, aftertaste and balanced coffee taste. On the other hand, diluted coffee at a ratio of 1:7 showed the lowest values for odor, sourness, bitterness and body intensity. Diluted coffee at a ratio of 1:3 showed the highest values for sweetness and acidity and was the most preferred in terms of aroma, aftertaste and balance. As a result, our study concluded that the optimal conditions for extraction and dilution of coffee with cold water are a ratio of ground coffee to cold water of 1:6 (w/v), followed by further dilution of the coffee by cold water at a ratio of 1:3.