This chapter examines the critical role of citizen participation in smart-city development, with a focus on the implementation of living labs as a framework for fostering community engagement and co-creation. Living labs are user-centered, open-innovation ecosystems that integrate research and real-life experimentation, allowing citizens to actively contribute to the design and development of urban services. This participatory approach ensures that smart cities remain aligned with enhancing residents' well-being, rather than merely advancing technological solutions. The chapter explores various case studies, including the Kashiwa-no-ha Living Lab, which serves as a model for integrating citizens into the decision-making processes of smart-city initiatives. Key findings highlight the importance of transparency, continuous dialogue, and the democratic involvement of diverse stakeholders. Challenges encountered in managing living labs, such as balancing technological feasibility with community needs and sustaining participant motivation, are also discussed. The chapter concludes by presenting best practices and strategic insights for effectively leveraging citizen participation in smart-city projects. By embracing living labs, smart cities can achieve a more inclusive, sustainable, and people-centric urban environment that reflects the true needs of their communities.