Both socio-cultural connotations and environmental adaptation are significant for the sustainable development of vernacular dwellings. Previous studies on the sustainable development of vernacular dwellings have mainly focused on either the interaction between physical form and socio-cultural logic or between physical form and environmental adaptation separately. Simultaneously, these studies have mainly discussed the physical condition of vernacular dwellings while ignoring the evolution of the space characteristics of vernacular dwellings. To further understand the sustainable development of vernacular dwelling spaces, this research adopted a “multiple evidence base” method to bring together the socio-cultural connotations of vernacular dwelling spaces and their adaptation to the natural environment. Space syntax theory and Ecotect software were deployed to analyze the socio-cultural logic and to simulate the light environment for environmental adaptation analysis. The Bai people’s courtyard houses in Gusheng village, Dali, Yunnan province were selected to conduct the fieldwork. The results reveal that ongoing social structures are prominent features for the socio-cultural connotations of the Bai people’s vernacular dwellings; the upper floor indoor lighting level has increased while the courtyard scale and the orientation of the dwellings remain unchanged in contemporary Bai people’s dwellings; there is a high synergistic relationship between the traditional living form and socio-culture as well as the natural environment in the traditional vernacular dwellings; the contemporary Bai people’s dwellings continue the living form and socio-culture while moderately adjusting the natural factors based on the modern way of life for sustainable development. This study hence extends the existing knowledge found in the literature and provides a more complete understanding of the sustainable approach to vernacular dwelling spaces.