This study investigates the integration of digital flows within Material Flow Analysis applied to Historical Small Towns (HSTs), using Taurasi, Italy as a case study. The research examines how digital technologies can promote responsible consumption while preserving the unique fabric of HSTs through Industry 5.0 principles and redefined Urban Metabolism (UM) frameworks. The methodology combines Strategic Environmental Assessment (SEA) with the DPSIR framework adapted for analyzing digital flows within traditional material systems. This methodology incorporates quantitative analysis of digital infrastructure alongside qualitative assessment through stakeholder engagement and expert consultation. Implementation of the MFA methodology in Taurasi reveals that digitization initiates a “smart metabolism” system that optimizes resource utilization while preserving heritage values. This integration yielded measurable outcomes, including a 15% reduction in energy consumption through smart monitoring systems, enhanced preservation of historical structures via sensor networks, and increased community participation in digital platforms. The study advances UM theory by demonstrating how digital and material flows can effectively coexist and interact within historical urban environments. The findings suggest that HSTs should develop strategic approaches to digital transformation that not only overcome geographical limitations but also support evidence-based decision-making. Such strategies should prioritize heritage-sensitive digital projects and community engagement to ensure technological advancement complements rather than compromises historical character. This research presents a novel application of MFA that systematically incorporates both physical and digital flows within urban systems. The proposed interoperable framework connects material metabolism with digital transformation concepts, offering a new paradigm for balancing technological innovation and heritage conservation in HSTs.