Over generations, economic development has accelerated traditional settlements in Taiwan while losing traditional culture. In Hakka villages, this is manifested in the changes in defensive spaces, the ‘spirit of place,’ and land use. Although some progress has been made through research into related issues, a correlated view has been missing. To explore the connection between the ‘spirit of place’ and defensive spaces in Wugoushui, a traditional representative settlement in Taiwan, this paper probes three questions: What are the changes in defensive spaces? What are the changes in the spirit of place? What are the connections between them? Taking the sixteen criteria of secure defensive space as the theoretical foundation, through more than a year of structured observations and in-depth interviews with ten representative residents, and based on context analysis and site analysis of the information collected, this paper has concluded that, although the actual functionality of Wugoushui settlement’s spiritual, behavioural, and physical defences have disappeared, cultural characteristics related to the settlement traditions, including religious beliefs, trust, sense of belonging, street network, nodes, institutions, territory, and social networks, constitute a concrete manifestation of the defensive space and the spirit of place as of today. This research contributes to developing a theory of the relevance of the spirit of place to the defensive space of settlements from a sustainability perspective and improving the cultural preservation and land management of traditional settlements.