Vernacular dwellings are the carriers of cultural inheritance, and their living conservation plays an important role in social development. With the continuous advancement of China’s urbanization, the crisis faced by vernacular dwellings is increasing. Therefore, the living conservation and cultural inheritance of vernacular dwellings are urgent. Combining the method of grounded theory with traditional surveying and drawing research, this paper takes five vernacular dwellings in China’s northern Jiangsu as the research object, excavates their cultural background, finishes their drawing, and constructs the strategy model of living conservation and cultural inheritance of vernacular dwellings on the basis of in-depth interviews. Lastly, it puts forward specific improvement measures for the five vernacular dwellings in terms of living conservation and cultural inheritance, so as to provide case support for the subsequent conservation and inheritance of vernacular dwellings in China’s northern Jiangsu.