Culture is perceived as the main driver of the restructuring of former industrial centres in capitalist societies. Hence, it proves useful to adopt a cultural approach to regional development in different dimensions, that is, culture as a meaning‐making process, a constitutive part of a community’s identity, or in an aesthetic sense. The study focusses on culture narratives in two East German old industrial towns. Here, local actors refer to culture both in stories of loss as well as in stories of change. They consider culture as an important part of their development narratives, yet with different aims and outcomes depending on whether they promote an instrumental or functional understanding of culture. As a result, culture narratives can either open up new opportunities and thereby contribute to changes in old industrial towns and de‐peripheralization, or they can foreclose specific development options and lead to further marginalization.