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Community regeneration has drawn much attention in both the urban development and sustainable design fields in the last decade. As a response to the regeneration challenges of Shanghai’s old and high-density communities, this article proposes two design-driven strategies: enabling residents to become innovation protagonists and facilitating collaborative entrepreneurial clusters based on the reorganization of community resources. Two ongoing collaborative projects between the Siping community and Tongji University—Open Your Space microregeneration (OYS) and the Neighborhood of Innovation, Creativity, and Entrepreneurship Towards 2035 (NICE 2035) living labs project—are adopted as main case studies. Research findings are put forward through a structured analysis of qualitative data. Firstly, we reviewed the situation and sustainable goals for Shanghai’s old residential communities, and how design-centric social innovation and collaboration can be effective interventions. Secondly, we analyzed resident empowerment approaches to decision-making, co-design, and co-management processes in OYS with participatory observation. Finally, through participants’ interviews and key events analysis in NICE 2035, we investigated how living labs reuse community distributed resources to develop lifestyle-based business prototypes. The inquiry of this article proposes a co-creation mechanism and action guides towards localized and sustainable community regeneration, which can provide a contextual paradigm for similar challenges.

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