The story of this project starts with the bad relationship between resident, tourists and the heritage sites. Firstly, local residents’ existence is not being acknowledged as part of the heritage. Secondly, tourists cannot find open heritage site easily because of excessive commercialization and unreadable space. Thirdly, there is a bad social interaction between the social group because tourists see residents’ living space as tourism spot. Based on this, the research question was put forward: “How to maximize the potential of heritage in South Luogu lane area through the participation of residents, the design of legible urban space and active social interaction?”The final output of this research design in an new urban regeneration approach that can balance the relationship between residents, tourists and heritage, forming a harmonious coexistence for this old district under today’s new context. The specific guideline that this approach put forward is not universal for all historical district. But the main idea of visiting route, which is separation & controlled mixture provides a new way of thinking for the coexistence of tourist and resident in over-developed tourism city in China.