Conservation of historic buildings and streets through rehabilitation is growing rapidly in many countries. The extent to which this approach is conducive to the aims of social sustainability has yet to be investigated. This study examines the attributes and factors that contribute to socially sustainable development in the rehabilitation of historic districts. A historic district in Shanghai, China, is used as a case study. The study area, Tianzifang, is a community-initiated rehabilitation, which has conserved traditional residential houses and old factories and transformed them into a community for creative industry. Site observations, personal interviews and questionnaire surveys of public opinion were conducted to examine the contributing factors. Through a literature review, fieldwork and a pilot study, 21 factors were identified as contributing social sustainability to the rehabilitation of historic districts and form the basis of the analysis of the case study and the opinion survey exercise. Through factor analysis, the underlying social sustainability factors that embrace the 21 attributes were derived. In order of importance, the social sustainability factors are ‘Maintain good physical condition to fulfill educational role’, ‘Provide public involvement opportunities’, ‘Enhance sense of place and local culture’, ‘Enhance cultural identity and collective memory’ and ‘Retain significant meanings and associations to the community’. This study presents a framework to understand the underlying factors for socially sustainable rehabilitation of historic districts, which provides insights for professionals and communities to design and implement rehabilitation strategies. The framework also provides a reference to examine other complex heritage sites worldwide. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.