Abstract: Living heritage represented by ancient cities has long occupied the forefront of international heritage-conservation research. Such cities are complex territories in which historical environments remain intertwined with contemporary urban life. Current Chinese conservation practice often privileges spatial ontology and cultural-tourism reproduction, while paying insufficient attention to human-land relations and residents' rights within a mutually constitutive socio-spatial system. Sustainable conservation therefore requires greater attention to self-organized practice. Drawing on socio-spatial theory, this paper introduces the concept of ancient-city “self-renewal.” Using the place-based revival of Mizhi Ancient City in Shaanxi Province, it identifies a pathway structured around demand as catalyst, functional embeddedness, reciprocal spatial construction, and regional collaboration. It further proposes a locally grounded “functional community” model that differs from the prevailing cultural-tourism development paradigm. The study offers theoretical and practical implications for achieving a mutually beneficial relationship between the reproduction of historic space and the development of individual households in small and medium-sized ancient cities.