Active resident engagement and effective organizer management are crucial for participatory neighborhood rehabilitation. Yet, existing public participation research focuses on residents, leaving the behaviors of organizers and their influence on outcomes less examined. Furthermore, most renewal studies treat the rehabilitation process as homogeneous and static, overlooking how stakeholders’ objectives, strategies, and actions evolve throughout the project lifecycle. To address these gaps, this paper employs stakeholder theory to propose the Stakeholder Influence Model (SIM), which investigates the multifaceted influence of stakeholders on resident participation across different phases of neighborhood rehabilitation. Drawing on 44 in-depth interviews and a four-month participant observation in Wuhan, China, deductive content analysis reveals stakeholders’ distinct influence strategies and both stimulating or disincentivizing effects on resident engagement. Specifically, indirect local government involvement, excessive delegation to neighborhood committees, and imbalanced power dynamics among residents are identified, jeopardizing the fairness, inclusiveness, and long-term viability of rehabilitation initiatives. By highlighting diverse stakeholders’ evolving impacts, this study advances current understanding of participatory urban renewal. The proposed SIM provides a robust framework for analyzing stakeholder interactions and informs policy interventions aimed at fostering more equitable and inclusive urban rehabilitation in China.