This article examines how cultural heritage conservation, often reflective of Western values, impacts local sustainable livelihoods (SL) in a living cultural heritage site. The article argues for the modification of the SL framework for analysing cultural heritage tourism through including an explicit focus on the transforming structures and processes of local livelihoods in Fujian tulou, China, a World Cultural Heritage Site. Drawing on data collected through in-depth interviews, non-participatory observations, and secondary sources, findings show that changes related to tourism development and heritage conservation can reduce the sustainability of livelihoods in living heritage sites. Tulou clusters tend to be regarded as tourist attractions and cultural relics rather than lived-in places. Traditional livelihoods have been affected as residents are forced to adapt to the demands of tourism. This research helps to expand the SL theory by incorporating cultural heritage capital and community self-organisation, and highlighting residents' self-controlled capacity toward assets.