Abstract: As living heritage with both cultural and economic attributes, traditional handicraft serves as an important resource for historic towns to achieve heritage conservation and regional revitalization. This paper systematically documents the cultural policies and spatial strategies adopted by Kanazawa, Japan, concerning innovative development models for traditional handicraft, the regeneration and layout planning of industrial spaces, the cultivation of skilled artisans, and the enhancement of cultural identity. Based on comparative analysis, it is suggested that historic towns in China can draw on the experience of Kanazawa's traditional handicraft revitalization. This includes adopting a systematic resource perspective, constructing an end-to-end support system spanning research, production, marketing, and promotion, and establishing a multi-stakeholder governance network involving local artisans, small and medium-sized enterprises, industry associations, and non-profit organizations. Additionally, it is crucial to promote the refined regeneration, revitalization, and integration of spaces under the guidance of cultural policies, improve a multi-tiered talent cultivation mechanism ranging from professional artisans to ordinary citizens, and build the local handicraft brand through regular festivals and events. By reviving traditional handicrafts, the cultural, economic, and social values of historic towns can be effectively enhanced.