The development of industrial revolution 4.0 impacted all aspects of human life. One of the aspects that predicted the future is the use of the internet, which will be increasingly significant in the industrial world. Indeed, this condition impacts the development of Small and Medium Enterprises (SMEs) in Indonesia, including Batik Tulis Lasem industries. Currently, batik entrepreneurs are not only faced with internal problems but also external ones as a result of industry 4.0. The purpose of this article is to explore how local stakeholders develop Batik Tulis Lasem in facing the 4.0 industrial revolution. This article uses descriptive qualitative methods to explain the research phenomenon. The primary data were obtained from observations, focus group discussions, and interviews, while secondary data from official government reports and previous research. The result is to respond to the internet's role in changing business models, and batik industry entrepreneurs take various steps depending on their capacity and management. In terms of governance, the local government issued a legal formal regulating Batik Tulis Lasem as hand-written batik instead of printed or stamped batik and provides facilitation to promote its product. Meanwhile, higher education institutions support the development of Batik Tulis Lasem in terms of management, online marketing training, capital and supporting tools, and patent assistance, such as the Intellectual Property Right (IPR).