Sustainable renovation is widely recognised as the optimal solution for the aging of residential buildings. Many aging rammed earth dwellings exist in the Hunan region of China. To guide these rammed earth dwellings to enhance their architectural quality while maximising the benefits from these activities in the environmental, energy, and economic domains, this study proposes a sustainable renovation approach which improves the construction tools, materials, processes, and the building features. In this study, we selected representative dwellings in the Hunan region for case renovation. In addition, the renovated dwellings are evaluated on three aspects: indoor physical environment, satisfaction questionnaire survey of owners and participants, and carbon emissions. The results show that the owners and participants are highly in favour of the sustainable renovation approach. The renovated homes also show improvements in the indoor environment, which can help reduce energy consumption. This study can provide a methodology for the sustainable renovation of aging rammed earth dwellings in Hunan and the other regions of China.