Situated in Tongxiang, Zhejiang Province, Wuzhen boasts a rich history that spans over 7000 years of civilization and more than 1300 years of urban development. In the last two decades, Wuzhen has embraced the principles of sustainable conservation and innovative utilization, successfully preserving its historic allure while transforming into a model for contemporary Chinese ancient town tourism. This article is structured into three main sections: firstly, it categorizes the systematic development and conservation efforts of Wuzhen into three distinct phases, detailing the specific strategies employed in each; secondly, it distills the core elements and rationale underpinning the Wuzhen model; and thirdly, it engages in a critical examination of the model, recognizing its merits and areas of exemplary practice, while also identifying potential risks and limitations. Through this analysis, the study offers targeted strategies and recommendations, providing not only a theoretical framework for guiding Wuzhen’s future planning initiatives but also practical insights for the conservation and development of other ancient towns.