Virtual reality (VR) technology has attracted the attention of architectural practitioners due to its ability to allow people to interact with proposed design elements through unique and immersive experiences. This study aims at providing a bottom-up decision-making approach, using VR technology for inhabitant engagement in the design process of historic urban district renovation to preserve local culture, improve community interaction, and replace printed paper use for review. The study focuses on the Tangzixiang district in the Anhui province, providing Scheme 1 with a traditional architectural style and Scheme 2 with a modern architectural style for the renovation. The schemes are developed in a VR environment in both smooth movement mode and node-based movement mode. A total of 62 inhabitants and 10 architecture practitioners finished the VR experience, and the survey-based results indicate that VR quality can satisfy the requirements of practitioners in a professional review. In the inhabitants’ view, Scheme 1, with a traditional architectural style, is identified as being more effective in preserving local culture. The scheme is improved by the design studio after the survey, based on the questionnaire results and comments. Notably, 56 participants scored five, indicating their agreement with the notion that VR enhances their engagement in the design stage. The effectiveness of the VR technology in the bottom-up decision-making process has proven to offer inhabitants opportunities to participate. This study demonstrates how this level of immersive experience in VR environments has the potential to be applied in more projects, aiding clients in better understanding design intent and helping them make more informed decisions early in the design process.