This talk examines the rural ethnic heritage-inspired transformation of the built environment of a relatively small county town in China. The paper explores the ways village-based ethnic heritage is being repositioned by local leaders as a resource for tourism-oriented revenue generation and for ‘improving’ the ‘quality’ and behaviour of town residents. Viewing heritage as a ‘technology of government,’ the paper provides an analysis based on three interrelated themes: the discourses by which town leaders and planners have conceived the heritage development project as one of improvement, the spatial practices by which those discourses have been realised in the built environment, and the ways residents themselves have appropriated and ‘inhabited’ this new ‘villagized’ city as they go about their everyday urban lives. Based on ethnographic field work, a survey, and extended interviews over a period of four years, the paper finds the town leadership’s faith in the ability of the built environment to shape and improve the conduct of citizens to be overstated. While the town’s transformation has generated a new sense of urban modernity among residents, their ways of inhabiting and using urban space have little relevance to the ‘heritagized’ environment in which they now live.