Abstract: As China's urban development enters the stage of stock renewal, Guangzhou, being at the forefront of urban regeneration, plays a critical role in enhancing residents' quality of life and optimizing urban spatial structure through the renovation of dilapidated and old housing. Current research predominantly focuses on macro-level policy interpretation or case-specific summaries, lacking systematic analysis of the implementation pathways, institutional innovations, and social participation involved in the "in-situ reconstruction" model. This gap hinders effective support for practical decision-making. Through an in-depth study of Guangzhou's "in-situ reconstruction" approach for dilapidated and old housing, this paper systematically identifies the multi-dimensional challenges in policy support, financing, property rights handling, and construction technologies, and proposes targeted renovation strategies. The aim is to provide theoretical insights and practical references for the renewal of dilapidated housing in Guangzhou and other high-density cities. Employing methods such as literature analysis, case comparison, and field research, and drawing on typical cases from Beijing, Hangzhou, and Guangzhou, the study summarizes effective mechanisms for government support in funding, streamlined approval processes, and technical guidance. The findings indicate that "in-situ reconstruction" offers significant advantages in resident resettlement, improved living environments, and intensive land use. However, its sustainable promotion relies heavily on systematic policy support, multi-stakeholder collaboration mechanisms, and the establishment of appropriate technical systems. From the perspectives of policy design, implementation mechanisms, and community governance, this study proposes strategic recommendations to optimize the policy framework, enhance project feasibility, and ensure sustainability.