As a representative of many developed cities in China, Shanghai is entering a new transformation phase as the city adopts a more humanist approach to improving the quality of urban life and 'keeping the bottom line' of available resources. Guided by first the ‘excellent global city’ and then the ‘people’s cities’ visions, neighbourhood micro-regeneration has emerged and developed in the past few years as a 'light' approach to tackle the spatial and social problems of the declining inner city through interventions on public spaces in and around residential neighbourhoods. By using projects implemented under the representative micro-regeneration initiative – ‘Walking in Shanghai’ community public space micro-regeneration scheme – as the primary case study while drawing insights from other projects conducted in a micro-regeneration way, the paper discusses micro-regeneration’s role in not only physically upgrading inner city neighbourhoods through creating or renovating public spaces, but also symbolically and discursively manifesting the quality- and people-centred nature of the present urban transformation stage and its social ideals such as participation and co-creation. As such, this approach is distinct from other inner city renewal paths such as property development, historic preservation and creative cluster development. However, as practices are still evolving with the changing policy contexts and development priorities, how the ongoing micro-regeneration experiments could further revive the inner city as an alternative to gentrification deserves more follow-up studies.