The large-scale urbanisation experienced by Chinese and other Asian cities over the past few decades has fragmented and demolished urban fabric, functional structures, spatial environments, and even social relations. Various urban-associated diseases have emerged consequently, and urban transformation is required to achieve more sustainable development. The micro-regeneration of urban community orientated on residents’ demands can be an approach to balance the urban development and preservation, to seek harmony between historical heritage, cultural revitalisation, urban distinctiveness, market profits, and local lives. As a positive intervention during the urban transition, it is argued that the elaborate micro-regeneration has turned into one of the significant subjects for both professional and educational fields of architecture towards future urbanism. This paper takes three research-based projects of housing upgrading in Xiaoxihu Community in the traditional quarter of Nanjing as examples of such micro-regeneration. In the interactive mode of “Learn- Research-Practice”, the authors have focussed on value fostering, multilateral cooperation, and an integrated multidisciplinary system, with equal attention to history, culture, space, and social ecology. These projects have further explored inclusive institutions and mechanisms that take both urban regeneration and community revitalisation into account, with nuanced integration of top-down planning and bottom-up self-regulation. Taking a small-scale, incremental approach, it has further investigated the characteristics of diversity and the role of universities, as a producer of knowledge in the urban regeneration process. With a pedagogical and pragmatic paradigm formed, this paper can be a reference to architecture education and practice in other cities facing similar challenges.