In the context of the global fine-grained urban renewal initiative, living streets closely related to people’s lives have become a hot topic. This study provides a comprehensive framework for addressing prominent issues such as the limited adaptability and inability to accommodate development in living streets. It explores the value and design innovation points of incorporating resilience concepts in the renewal of living streets. Taking the living streets in Yixing, Jiangsu Province, as an example, the grounded theory approach was employed to conduct in-depth interviews and three-level coding of the data to systematically elucidate the influencing factors and implementation paths of resilience in living streets. The study reveals that the resilient development of living streets is influenced and constrained by six factors: positive values, demand factors, spatial environment, contextual factors, operation and management, and resilience characteristics. Each of these six main dimensions encompasses multiple subcategories and the factors influencing living streets’ resilience through different mechanisms. Building upon the guidance-demand-design-context-operation pathway model for enhancing the resilience of living streets in small and medium-sized towns in the Jiangnan region, the study proposes new perspectives such as correct orientation, adaptability to change, and a balance between rigidity and flexibility tailored explicitly to the enhancement of resilience in living streets. These novel perspectives contribute to the theoretical research achievements on the resilience development of living streets in small and medium-sized towns in the Jiangnan region of China to a certain extent. Furthermore, these findings hold significant implications for attaining SDG11, which emphasizes sustainable urban development.