The growing global concern over heat-related health risks, exacerbated by climate change, disproportionately affects low-income populations, particularly in tropical regions like Indonesia. This study investigates indoor thermal conditions in home-based enterprises (HBEs) within the informal urban settlements of Surakarta City, Indonesia, focusing on the struggle for thermal comfort under constrained conditions. By addressing the thermal comfort challenges in low-income urban housing, this research contributes to sustainable development goals, aiming to enhance living conditions in tropical climates. Our methodology included detailed field measurements of thermal comfort using standard indices in these dwellings, complemented by surveys and interviews to understand building designs, occupant behaviors, and adaptation strategies. Findings indicate that temperatures inside the dwellings frequently exceeded 30 °C during 50–60% of working hours, prompting residents to adopt coping strategies such as opening windows, adjusting work schedules, and utilizing shading devices. Space limitations necessitated multifunctional use of dwellings, exacerbating heat and humidity from activities like cooking and ironing. Despite reliance on natural ventilation, ineffective architectural layouts impeded airflow. This study highlights the urgent need for sustainable architectural solutions that accommodate the dual residential and commercial functions of these spaces, aiming to improve living conditions in such challenging environments.